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July 6, 2020, 1:35 p.m. EDT

Dick's Sporting Goods is Bank of America's 'solitary leisure' pick on spike in demand for bicycles

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By Tonya Garcia

With demand for bicycles soaring due to the coronavirus, Dick's Sporting Goods Inc. /zigman2/quotes/200566298/composite DKS +0.24% is Bank of America's "solitary leisure" pick. With consumers shifting their dollars from entertainment like movies and amusement parks, analysts note a 103% year-over-year spike in dollars spent on bicycles in May, based on debit card activity. Despite states beginning to reopen, June sales remain up 68% compared to last year. Bank of America analysts led by Alexander Perry also note a rise in downloads for the Strava app, which offers GPS tracing to cyclists and runners. Dick's offers a variety of bike brands and a large percentage of its bikes are priced less than $500. Bank of America channel checks suggest a high number of out-of-stocks, however, analysts say the athletic retailer will raise inventory. Other factors that will give Dick's margin upside include a likely uptick for baseball gear, with the season delayed by the pandemic, and increasing favor from Nike Inc. /zigman2/quotes/203439053/composite NKE +1.40% due to Dick's capabilities both online and in stores. Bank of America also thinks Fox Factory Holding Corp. /zigman2/quotes/208878916/composite FOXF +0.85% will benefit thanks to its mountain bike business. Bank of America has a $50 price objective on Dick's Sporting Goods, and $90 on Fox Factory. Dick's Sporting Goods stock has fallen 17% for the year to date, Fox Factory has rallied 25.4% and the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.06% is down 1.7% for the period.

/zigman2/quotes/200566298/composite
US : U.S.: NYSE
$ 45.80
+0.11 +0.24%
Volume: 1.52M
Aug. 7, 2020 4:00p
P/E Ratio
44.73
Dividend Yield
2.73%
Market Cap
$4.10 billion
Rev. per Employee
$186,650
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/zigman2/quotes/203439053/composite
US : U.S.: NYSE
$ 101.86
+1.41 +1.40%
Volume: 5.55M
Aug. 7, 2020 4:00p
P/E Ratio
64.49
Dividend Yield
0.96%
Market Cap
$158.89 billion
Rev. per Employee
$529,466
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/zigman2/quotes/208878916/composite
US : U.S.: Nasdaq
$ 107.63
+0.91 +0.85%
Volume: 388,918
Aug. 7, 2020 4:00p
P/E Ratio
57.95
Dividend Yield
N/A
Market Cap
$4.46 billion
Rev. per Employee
$276,440
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/zigman2/quotes/210599714/realtime
US : S&P US
3,351.28
+2.12 +0.06%
Volume: 2.28B
Aug. 7, 2020 5:10p
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