Foot Locker Gains From Growing Strategic Brands: Analyst Sees Strength In Community And Power Stores
Portfolio Pulse from Nabaparna Bhattacharya
Telsey Advisory Group analyst Cristina Fernández maintained an Outperform rating on Foot Locker, Inc. (NYSE:FL) and raised the price target from $22 to $31. The company's Q3 2023 results and revised guidance indicate stable trends, with no worsening as seen with other retailers. Foot Locker's promotional activities were anticipated in previous guidance and are not due to a soft consumer environment. The company is receiving vendor support to clear inventory and expects to end the year with inventory levels flat or slightly down. Sales trends improved through Q3, with a strong Black Friday weekend. Strategic initiatives, including the growth of strategic brands and community and power stores, are progressing. However, there is uncertainty for 2024 regarding inventory management and margin recovery. The analyst projects a lower EPS for 2023 and 2024, with operating margin compression in 2023 and a slight decrease in operating margin projection for 2024. FL shares dropped by 1.34% to $27.30.
November 30, 2023 | 7:33 pm
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POSITIVE IMPACT
Foot Locker's Outperform rating is maintained and the price target is raised to $31 by Telsey Advisory Group. Q3 results show stable trends and strategic initiatives are progressing. There is uncertainty for 2024, but the current outlook is positive. Shares fell slightly after the announcement.
The positive outlook from the analyst, including the raised price target and the report of stable trends, suggests a potential increase in investor confidence and a positive short-term impact on FL's stock price. The slight share price drop could be a temporary reaction to broader market conditions or profit-taking.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100