Hibbett Sports, Inc. (HIBB) shares rose more than 1.5% in Wednesday’s session after Susquehanna upgraded the stock to Positive with a price target of $25.00 per share. Analyst Sam Poser believes that the company’s best-in-class digital and omni-channel capabilities to improve customer engagement, customer loyalty and acquisition.
In addition, Hibbett outside the mall and rural store fleet provides a distinct advantage over the competition. While COVID-19 has affected the industry, Ask believes that the company has sufficient liquidity and financial resources to the difficult weather conditions of the environment after the end of the first quarter to $106.2 million in cash with a burn rate of 10 million dollars.
The move comes shortly after Hibbett Sports reported mixed financial results for the first quarter. Revenue declined by 21.4% to $269.84 million, beating consensus estimates by $58.39 million, but non-GAAP earnings were 31 cents per share, missing consensus estimates of 12 cents per share. Comparable store sales decreased 19.5% in the first quarter due to a large number of closed stores, but the e-commerce, sales have increased by more than 110% and digital, the traffic has increased 80% year on year.
From a technical point of view, the stock retested the 200-day moving average of $20.53 after yesterday, the benefit of the move. The relative strength index (RSI) is hovering near the overbought zone, at conditions of 67.45, but the moving average convergence divergence (MACD) has continued its upward trend. These indicators suggest that the stock could experience some consolidation before moving higher in the coming sessions.
Traders should expect to see a break of the 200-day moving average to the prior highs of close to $31.00 over the medium term. If the stock fails to break out, traders could see a period of consolidation, between the high of trend line resistance and lower trendline support at $18.50. In the medium term, the trend remains bullish, but there could be a short-term consolidation.
The author holds no position in the stock(s) mentioned except through the passive management of index funds.