We maintain our Outperform recommendation on Hibbett Sports (HIBB) as we anticipate it to perform well above the market. Hibbett’s sharp focus towards mid-sized and smaller markets and strategic mix of branded as well as localized merchandise provide an edge over its rivals.
The company easily surpassed the Zacks Consensus Estimate in the first quarter of fiscal 2011 and boosted its guidance. Hibbett’s management is also committed towards expanding the store network in fiscal 2011.
Moreover, the company’s debt-free balance sheet and full availability under credit facilities bode well for future operating performance. Our target price of $29.00, or 19.2X 2011 EPS, reflects our positive view on Hibbett Sports.