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Dick's Sporting Goods rally may be over: Goldman

Merchandise is displayed for sale at a Dick's Sporting Goods Inc. store in West Nyack, New York.
Craig Warga | Bloomberg | Getty Images

Goldman Sachs on Wednesday downgraded shares of Dick's Sporting Goods to neutral from buy, removing the stock from its conviction buy list because of stretched valuations.

"Valuation has caught up with our earnings forecasts and, while we expect upside to guidance in 2H [second half] and earnings acceleration thereafter, we see upside to the stock as more limited from here," analyst Stephen Tanal wrote in a research note.

In 2016, shares of the specialty retailer rallied 66 percent, reaching an intraday all-time high during Tuesday's trading session on the back of strong earnings and expanding market share.

Dick's Sporting Goods emerged this year as one of the few brick-and-mortar retailers to show healthy sales figures, a trend that's been well received by investors.