Dick's is buying Foot Locker for 'a very fair price': Analyst
Amid its $2.4 billion deal to acquire shoe retailer Foot Locker (FL), Dick's Sporting Goods (DKS) is maintaining its full-year profit forecast.
Morningstar senior equity analyst David Swartz comes on The Morning Brief to weigh in on Dick's recent stock activity and share his thoughts on the retailer's acquisition of Foot Locker.
Also catch David Swartz weigh in on department store Macy's (M) progress in its turnaround plan.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
In your notes, you mention and given your star rating on the firm, I can tell that you have questions about the valuation. How does the Foot Locker acquisition impact how you're thinking about the valuation of Dicks going forward?
Yeah, it's hard to say because it's still early. The Foot Locker deal was just announced last week and people are still trying to assess how it's going to impact Dicks in the short term and the long term. Uh, I was probably one of the few that actually thought that Dicks was quite overvalued when it was over $200 a share. I thought it was worth closer to $160. Um, so when the stock fell after the Foot Locker deal, to me that was partly because Dick's stock was overvalued to begin with. I understand why Dick's stock was at such a high level because Dicks has been performing extremely well in the last few years. Uh, the business has really transformed and it's been outperforming everybody, certainly including Foot Locker. And so a lot of people are very unhappy that Dicks is combining with Foot Locker, which realistically is an inferior business, but I think that Dicks is buying it for a very fair price at about two and a half billion dollars for Foot Locker. The Foot Locker stock price has been weighed down. And so, even though Dicks is paying a premium over where the stock had been trading, uh, they're still, I think, buying it at a fair price, at only about six times depressed EBITDA. And I think from Dick's management's perspective, they're able to buy Foot Locker here for a very attractive valuation.
All right. We are going to be watching closely as that deal looks to close. David, thanks so much. Appreciate it.
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Historically, bluebird has excelled as a scientific innovator and should be very proud of the many achievements it has delivered to patients. Our vision is to further that legacy of scientific excellence while improving the commercial execution of our approved products to rapidly expand access to lifechanging gene therapies.' 'We are excited to back bluebird in partnership with SK Capital. We believe providing bluebird the necessary funding along with the new leadership team will help bluebird realize its full potential,' said Joe Bress, Carlyle Partner and Global Co-Head of Healthcare. Bali Muralidhar, Co-Managing Partner and Chief Investment Officer & COO of Abingworth, Carlyle's life sciences investment franchise, added, 'There is an incredible opportunity to bring bluebird's groundbreaking therapies to more patients in need, and we look forward to advancing bluebird in its mission.' 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With more than a decade of scientific leadership in gene therapy and three FDA-approved therapies for sickle cell disease, β-thalassemia, and cerebral adrenoleukodystrophy, the company is committed to ensuring access, reliability, and patient-centered care. bluebird is headquartered in Somerville, Massachusetts. About Carlyle Carlyle (NASDAQ: CG) is a global investment firm with deep industry expertise that deploys private capital across its business and conducts its operations through three business segments: Global Private Equity, Global Credit and Carlyle AlpInvest. With $453 billion of assets under management as of March 31, 2025, Carlyle's purpose is to invest wisely and create value on behalf of its investors, portfolio companies, and the communities in which we live and invest. Carlyle employs more than 2,300 people in 29 offices across four continents. Further information is available at Follow Carlyle on X @OneCarlyle and LinkedIn at The Carlyle Group. About SK Capital SK Capital is a transformational private investment firm with a disciplined focus on the life sciences, specialty materials, and ingredients sectors. The firm seeks to build resilient, sustainable, and growing businesses that create substantial long-term value. SK Capital aims to utilize its industry, operating, and investment experience to identify opportunities to transform businesses into higher performing organizations with improved strategic positioning, growth, and profitability, as well as lower operating risk. SK Capital currently has approximately $10 billion in assets under management as of December 31, 2024. For more information, please visit Forward Looking Statement This press release contains 'forward-looking statements' within the meaning of the Private Securities Litigation Reform Act of 1995. All statements that are not statements of historical facts are, or may be deemed to be, forward-looking statements. 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