Foot Locker Is Well Positioned For The Holidays, Analyst Says In Upgrade
The Foot Locker Analyst: Robert Ohmes upgraded Foot Locker's stock from Underperform to Buy with a price target lifted from $20 to $50.
The Foot Locker Thesis: Nike is committed to working with Foot Locker to build-long term momentum through favorable product allocations, Ohmes wrote in the note. Signs of momentum should be apparent in the coming months from strength in products like Air Force 1, Air Jordan 1, Blazer and Retro Jordan.
Meanwhile, BofA's proprietary credit and debit card spending data at nearly 130 mall-based retailers point to improving sentiment in recent weeks. Specifically, daily mall spend turned positive year-over-year in September and points to a recovery in mall traffic trends.
Related Link: Why Barclays Is Turning Bullish On 4 Retailers
Foot Locker web traffic and Google Trends accelerated in September due to a delayed back-to-school shopping season and this year's Labor Day calendar shift, according to Ohmes.
Finally, Foot Locker's stock is trading at a "compelling" valuation of around eight times the fiscal 2022 estimated EPS. Also, Foot Locker offers investors "a discounted way" to take advantage of Nike's momentum.
FL Price Action: Shares of Foot Locker were trading higher by 2% Tuesday morning at $38.29.
© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.