Sporting goods stocks are among the best-performing stocks since the Covid-19 pandemic began. But since many of these stocks are a phenomenon …
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June 15, 2021 4 minutes to read
This story originally appeared on MarketBeat
Sporting goods stocks, which are part of the consumer discretionary sector, have been among the best performing stocks since the beginning of the Covid-19 pandemic. But with many of these stocks seeing phenomenal gains, the question is, is it time for fitness stocks to slow down?
The bearish argument is that with the economy reopening, many Americans will go back to the gyms and fitness centers. That will take the steam off the demand for home fitness equipment. Analysts also fear that the demand for exercise clothing and other exercise equipment has reached critical mass.
And for their part, it appears that some sporting goods companies are forecasting slower growth in 2021. This is especially true because they face difficult comparisons with 2020 sales rates fueled by the pandemic.
Habits have a fun way to stay, however. The houses were converted to allow training at home. New habits have established themselves. In addition, the youth sport is now back in season. And when we get into late summer, that should accelerate when the fall sports season begins. Sports stores have been forced to adopt an omnichannel model that is likely to hold up well.
However, as in any industry, quality is still important. And here are three of the sporting goods stocks that still have legs.
Dicks sporting goods (DKS)
Dick’s sporting goods (NYSE: DKS) The stock is up 77% in 2021 and is up a whopping 155% in the 12 months ended June 14. And on the heels of a strong earnings report, The DKS share is up 13% in the last month.
One reason Dick’s Sporting Goods tops this list is because it employs an experiential House of Sport store-in-store concept that gives consumers a reason to choose the retailer beyond price. This idea of creating an in-store experience can also be found in the company’s Golf Galaxy spin-offs. The pandemic rekindles interest in sports, and Dicks is Promise to spend $ 20 million to benefit from the renaissance of golf equipment.
The analyst’s outlook is a bit difficult. Overall, the DKS share has a 12-month price target of $ 88.05 which is over 10% below current price. However, the company has received several price target increases recently, suggesting an overall bullish outlook for the stock.
Outdoor decker (DECK)
Decker outdoors (NYSE: DECK) is a niche shoe designer and distributor, perhaps best known nationwide as the maker of the of iconic UGG brand. The company is also benefiting from the increasing sales of its HOKA ONE running shoe.
The DECK share is up 18% in 2021 and 73% in the last 12 months. However, with the stock at an all-time high, it’s fair for investors to wonder if the run has peaked.
Not so, say the analysts, who give the DECK share a price target of USD 370, which is another 10% above the current price. If that’s not enough to whet your appetite, keep in mind that recent analyst reports have significantly higher price targets.
Sports camp (SPWH)
Sports camp (NASDAQ: SPWH) is a straggler among sporting goods stocks. The SPWH share has gained “only” 41% in the last 12 months. And the stock is essentially flat in 2021.
But with the stock around its 52-week high, the stock price is consolidating and technically it could be poised for a bullish break above. Analysts give the share an upward trend of around 12.5%. Investors should also be encouraged by the fact that the company had profits and sales in excess of the same quarter in 2020.
The bullish argument for SPWH stock has to do with its focus on outdoor activities like camping and fishing. These are two activities that have been restricted in some regions due to efforts to contain the pandemic, although they appear to have allowed adequate social distancing. The company wants to benefit from the fact that many outdoor enthusiasts are returning to nature.
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