Why Foot Locker (FL) Stock Is Up Today
What Happened:
Shares of footwear and apparel retailer Foot Locker (NYSE:FL) jumped 5.7% in the morning session after Piper Sandler analyst Abbie Zvejnieks upgraded the stock's rating from Neutral to Overweight (Buy) and raised the price target from $24 to $33. The price target implied an 8% upside from where shares traded when the upgrade was announced. The upgrade is based on anticipated benefits from leaner inventories at year-end, enabling Foot Locker to introduce trendy styles in 2024. Zvejnieks also highlighted the expansion of non-Nike products, which is expected to offset challenges stemming from Nike's business "reset" with Foot Locker.
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What is the market telling us:
Foot Locker's shares are not very volatile than the market average and over the last year have had only 22 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 15 days ago, when the stock gained 8.2% on the news that the company reported third quarter results that beat analysts' revenue and EPS expectations, driven by better-than-expected (but still declining) same-store sales growth. Full-year earnings guidance exceeded Wall Street's estimates. The company showed solid business momentum as it signed a multi-year deal with the NBA to become its official marketing partner on November 16th and announced that it will expand into India in 2024. On the other hand, its earnings forecast for next quarter underwhelmed. Overall, this was a really good quarter that should please shareholders.
Foot Locker is down 16.1% since the beginning of the year, and at $31.04 per share it is trading 33.3% below its 52-week high of $46.54 from February 2023. Investors who bought $1,000 worth of Foot Locker's shares 5 years ago would now be looking at an investment worth $630.94.
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