Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.
The risk to Foot Locker, Inc’s (NYSE:FL) revenue and EBIT margin seem priced in, following the massive year-to-date pullback in its share price, according to Morgan Stanley.
The Analyst
ENTER TO WIN $500 IN STOCK OR CRYPTO
Enter your email and you'll also get Benzinga's ultimate morning update AND a free $30 gift card and more!
Morgan Stanley’s Lauren Cassel upgraded Foot Locker from Underweight to Equal-Weight, maintaining the price target at $40.
The Thesis
The trend of consumers shifting to shopping directly with brands has put Foot Locker’s revenue and EBIT margin at risk, Cassel said. The company has reported ongoing EBIT margin declines so far in 2019.
“We continue to prefer brands over retailers, and our AlphaWise survey results suggest Foot Locker, among others, continue to lose traction in an increasingly direct-to-consumer (DTC) world,” the analyst wrote in a note.
Want Private Access to Benzinga Analyst?
Check out the latest strategies our team of experts are using every week so that you can always adapt to the market like the pros!—Get FULL Access to This Week's Webinar Here.
The company is scheduled to report its second-quarter results Aug. 23 and management’s guidance appears more achievable than last quarter, Cassel mentioned.
She added that the stock could “re-rate meaningfully higher” if Foot Locker manages to deliver comp of 5% or more, regardless of the margin result. The buy-side expectations are set at 3.5-4%.
The second-quarter guidance reflects gross margin of flat to -20 bps and SG&A deleverage of 80-100 bps, which appears “potentially beatable,” Cassel said.
Price Action
Shares of Foot Locker traded around $40.54 Thursday afternoon.
Related Links:
Is Another Potential Acquisition Coming For Foot Locker? Analyst Looks At European Market
Analysts Mixed On Foot Locker Following Strong Q4 Earnings
Crypto Whales Are Loading Up — Are You?
New research shows the biggest crypto buyers are back. And this time? They could hold for the possibility that Bitcoin will surpass $100,000 in 2024. You don’t want to miss the next massive crypto bull run like we saw in 2020 and 2021. To know exactly what’s going on and what to buy… Get Access To Benzinga’s Best Crypto Research and Investments For Only $1.