UPDATE: Goldman Sachs Downgrades Foot Locker on Slowing Sales
In a report published Friday, Goldman Sachs analyst Taposh Bari downgraded Foot Locker (NYSE: FL) from Conviction List Buy to Neutral, and lowered the price target from $41.00 to $37.00.
In the report, Goldman Sachs noted, “We downgrade FL to Neutral. We are incrementally less bullish on FL, as we think attractive valuation and basketball momentum are no longer enough reason to buy the stock. FL has become a share donor to not only vendors' direct operations, particularly at Nike, but more recently to non-athletic retailers. This, combined with slowing sales across many athletic brands, lessens our conviction in a SSS pickup, which we see as a necessary catalyst for the stock to re-rate. Since added to the Buy List on 11/27/12, FL is +3.5% vs. the S&P 500 +21.3%. TTM, FL is +3.0% vs. the S&P 500 +20.7%. Our call underperformed because the multiple failed to re-rate, as detailed below.”
Foot Locker closed on Thursday at $35.67.
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