Amer Sports shot up 19% when it reported first-quarter earnings on May 20. Shares stalled after that, but not quite two months later, the IBD Stock of the Day is clearing another entry.
The sporting goods company exceeded every analyst's expectations when it blew past first-quarter estimates. The company also raised full-year guidance. Management said strong pricing power left it in good position to navigate rising tariffs and macro uncertainties.
Although the stock has flattened since that earnings surge, a bit of momentum is building among Wall Street analysts.
On Wednesday, TD Cowen analyst John Kernan raised his price target to 43 from 41 and kept a buy rating. He highlighted Amer's high quality and premium innovation and best-in-class management. He considers consensus estimates to be too low, TheFly.com reported.
On June 26, Piper Sandler initiated coverage with an overweight rating and a 45 price target. The firm called Amer Sports a "unique portfolio company" in which all three key segments are executing well, which is something unusual in the consumer space, according to TheFly.com.
Amer Sports owns about 10 brands of sports equipment and apparel, including Wilson volleyballs and basketballs, Arc'teryx premium clothing and Louisville Slugger baseball equipment. Its Wilson tennis business sponsors some of the world's top players, including No. 1 women's pro Aryna Sabalenka.
Analyst Estimates For Stock Of The Day
The analysts' consensus earnings estimate for the current quarter is 2 cents a share, a drop of 62% year over year. For Q3, the consensus estimate is 19 cents a share, an increase of 39%. Q2 sales are expected to climb 18% to $1.174 billion, with Q3 sales up 13% to $1.533 billion, according to FactSet.
Analysts are mostly bullish on the IBD Stock of the Day, with 15 of the 21 who cover the company giving it buy or outperform ratings. The average target price is 42.11, according to FactSet. That's less than 2 points away from the current quote of 39.75.
Amer Sports leads the leisure products industry group with a 93 IBD Composite Rating, according to IBD Stock Checkup. It also has the industry's best Relative Strength Rating, at 97.
Sporting Goods Leader In Buy Zone
The stock has been trading between 35 and 40 for the past seven weeks. A daily chart shows the stock is rising above a trendline with an entry around 38.25. Similarly, last week's high of 38.71 acts as another buy point. In short, the stock is actionable.
The relative strength line is near highs, which is a positive sign. An up-down volume ratio of 1.5 and Accumulation/Distribution Rating of B- indicate that institutional investors have been buying shares while the stock pauses.
See The Latest Updates To IBD Watchlists
Amer Sports stock has a 21-day average true range (ATR) of 3.03%. The average true range is a metric available on IBD's MarketSurge that gauges the characteristic breadth of a stock's behavior. Stocks with a high ATR tend to make large price moves that can trigger sell rules. Stocks with lower ATRs tend to make more incremental moves.
With the S&P 500 and Nasdaq now in a power trend, investors can buy stocks with ATRs up to 8%, though they should be wary of being too concentrated in high-octane names.
