NEW YORK (TheStreet) -- Shares of Big 5 Sporting Goods(BGFV) - Get Report were surging 10.92% to $15.39 on heavy trading volume mid Thursday afternoon as Deutsche Bank raised the sporting goods retailer's stock rating to "buy" from "hold."
The firm also lifted the El Segundo, CA-based company's price target to $16.50 from $10.
Big 5's current valuation doesn't reflect its accelerating sales trends, profitability improvements and higher earnings power, Deutsche Bank noted.
The firm added that Big 5 should be able to grab some business from the now-defunct athletic goods retailer Sports Chalet, whose parent company Vestis Retail Group filed for bankruptcy earlier this year.
Big 5 could see an additional sales boost as a result of Sports Authority store closures, Deutsche Bank said. The sports retailer filed for Chapter 11 bankruptcy in March.
About 1 million of Big 5's shares have changed hands so far today vs. its average volume of 196,613 shares per day.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
The team rates Big 5 Sporting Goods as a Hold with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its solid stock price performance, revenue growth and good cash flow from operations. However, as a counter to these strengths, the team also finds weaknesses including deteriorating net income, disappointing return on equity and poor profit margins.
You can view the full analysis from the report here: BGFV