Big 5 Sporting Goods (BGFV) was upgraded from Neutral to Outperform after back-to-back quarters of positive earnings surprises along with an encouraging guidance for the fourth quarter of fiscal 2012.
Driven by strong top-line performance along with effective cost management, Big 5 Sporting s earnings of $0.38 per share for third-quarter 2012 came 44.4% higher than the year-ago quarter earnings and handily surpassed the Zacks Consensus Estimate of $0.32. The company now anticipates earnings per share in the range of $0.13 $0.21 per share in fourth-quarter fiscal 2012.
We believe the company’s top line will augment in the future with the strategy of resuming the store expansion program. Moreover, the company’s new business intelligence system and distribution channel will help significantly reduce the operating expenses. Our target of $14.00 is based on 20x EPS estimates.
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