While the retail footwear industry has experienced some tough times given major brands increased focus in e-commerce and direct to consumer sales, if Foot Locker, Inc. (NYSE: FL) were to never grow again, Barclays believes it's still under valued.
“In a scenario where Foot Locker does not experience any growth in perpetuity, we achieve a $51 valuation, higher than its current price: This scenario assumes flat comp store sales and flat square-footage growth over the next 10 years,” said Barclays analyst Matthew McClintock.
According to McClintock, an unrealistic negative future is already priced in to Foot Lockers sales. Shares of Foot Locker have suffered a 31 percent year-to-date decline.
Related Links: The Footwear Industry Has A Hispanic Problem
Matt Powell of NPD Group told Benzinga in a previous interview that he doesn't expect Nike’s deal with Amazon to have a big impact.
“There is no question they (Nike) are growing their DTC, but I don’t think the deal with Amazon will have a big impact initially. I think every brand is focused on DTC, particularly on the e-commerce aspect,” said Powell.
Barclays maintains an Overweight rating on Foot Locker with a $80 price target.
Latest Ratings for FL
|Jul 2017||Deutsche Bank||Maintains||Buy|
|Jul 2017||Oppenheimer||Initiates Coverage On||Perform|
View More Analyst Ratings for FL
View the Latest Analyst Ratings
See more from Benzinga
- Nike's US Business 'Disturbing': One Analyst Remains Cautious Despite Earnings Beat, Stock Run
- Nike's Direct-To-Consumer Approach, Push Into Digital Keep Stock Buy Rated At UBS
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.