Barclays Positive On Dick's Sporting Goods' Affinity Sports Buy

Barclays said the Dicks Sporting Goods Inc (NYSE: DKS)'s acquisition of San Diego-based sports management technology firm Affinity Sports should boost its competitive advantage and differentiating factor for the company in the sporting goods industry.

The acquisition will grow Dick's presence in youth sports technology, and the Affinity Sports will work under the Dick's Team Sports HQ platform.

"Although this segment represents a small part of DKS, we believe it can have larger implications for the rest of the business. By becoming more involved in sports management technology, DKS should contribute to the growth in youth team sports, which should increase demand and help support sales growth," analyst Matthew McClintock wrote in a note.

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Moreover, the analyst said the Affinity Sports acquisition provides valuable consumer information amid current disruptive environment that the team sports business faces due to the liquidations from TSA and Sports Chalet.

"Furthermore, negative impacts from rapid shifts in consumer preferences in the sporting goods industry could potentially be mitigated with more consumer information as DKS should have greater insight into demand," McClintock added.

McClintock has an Equal-Weight rating on Dick's with a price target of $50.

At time of writing, shares of DKS were down 0.80 percent to $58.37.

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