Hibbett ‘s strong relationship with Nike should help boost share gains for the sporting goods company going forward, Bank of America said. Analyst Alexander Perry upgraded shares of Hibbett to buy from neutral and upped the bank’s price target on the stock to $75 from $66 share in a note to clients Tuesday, suggesting shares could rally 32% from Monday’s close. Among his reasons for liking the stock, Perry drew attention to the company’s relationship with Nike and the availability of highly sought-after products like the Air Force 1 shoes. He also called attention to the company’s good product allocation and positioning with its vendors. “We believe HIBB’s relationship with Nike is very strong as HIBB provides access to underserved geographies and customers that are complementary to Nike’s direct-to-consumer (DTC) business (esp. given 80% cash/debit penetration),” he wrote. “Importantly, we do not believe HIBB is losing access to Nike product, and do not expect its Nike penetration to decline meaningfully.” Hibbett’s core demographic also includes 15- to 24-year-olds typically insulated from rising costs, Perry said. He anticipates upside to same-store sales in the second half of the year as the company rolls out a better launch calendar and the availability of its Nike products improves. “We believe HIBB’s core consumer remains healthy, driven by strong wage increases from lower income cohorts & no significant change in financing (remains LSD% of sales),” Perry said. “We did not see evidence of elevated in-store promotional activity, as we believe HIBB is clearing excess inventory on-line Shares of Hibbett are down 21% this year. The stock gained nearly 4% in premarket trading. — CNBC’s Michael Bloom contributed reporting
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