Barclays downgrades JD Sports on Hibbett acquisition
[Jevanto Productions - stock.adobe.com]
Barclays downgraded on Monday to 'equalweight' from 'overweight' and cut the price target to 140p from 165p after the retailer announced the acquisition of US rival Hibbett last week for $1.1bn.
JD Sports said it would pay $87.50 a share in cash for Hibbett stock.
"Companies cannot choose the perfect time to do deals, but we believe that rebuilding a track record would have been preferable before spending circa £900m on another acquisition, especially given concerns over Nike's innovation," Barclays said.
Headquartered in Birmingham, Alabama, Nasdaq-listed Hibbett has 1,169 stores in 36 states across the US trading under the Hibbett and City Gear fascias.
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