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Deutsche Bank Reduced Foot Locker Price Target to $79 per Share

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Price movement of Foot Locker

Foot Locker (FL) has a market cap of $8.3 billion. It rose by 3.2% to close at $59.31 per share on May 16, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -4.6%, -3.4%, and -8.1%, respectively. This means that FL is trading 2.6% below its 20-day moving average, 4.8% below its 50-day moving average, and 10.0% below its 200-day moving average.

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Related ETFs and peers

The SPDR S&P 400 Mid-Cap Growth ETF (MDYG) invests 1.2% of its holdings in Foot Locker. The ETF tracks a market-cap-weighted index of growth companies culled from the S&P 400. The YTD price movement of MDYG was 2.2% as of May 16, 2016.

The Vanguard S&P Mid-Cap 400 Growth ETF (IVOG) invests 1.1% of its holdings in Foot Locker. The ETF tracks a market-cap-weighted index of growth companies culled from the S&P 400.

The market caps of Foot Locker’s competitors are as follows:

  • Walmart (WMT) — $213.3 billion
  • DSW (DSW) — $1.8 billion

Deutsche Bank reduced Foot Locker price target

Deutsche Bank has reduced the price target of Foot Locker to $79 from $80. It maintained the stock rating as a “buy.” TheStreet Ratings rated Foot Locker as a “buy” with an “A-” score.

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Performance of Foot Locker in fiscal 4Q15 and fiscal 2015

Foot Locker reported fiscal 4Q15 sales of $2,007.0 million, a rise of 5.0% compared to sales of $1,911.0 million in fiscal 4Q14. It reported litigation and impairment charges of $5 million in fiscal 4Q15 compared to $1 million in fiscal 4Q14.

Its net income and EPS (earnings per share) rose to $158.0 million and $1.14, respectively, in fiscal 4Q15 compared to $146.0 million and $1.01, respectively, in fiscal 4Q14. It reported non-GAAP EPS of $1.16 in fiscal 4Q15, a rise of 16% compared to fiscal 4Q14.

Fiscal 2015 results

In fiscal 2015, FL reported sales of $7,412.0 million, a rise of 3.6% YoY (year-over-year). It reported litigation and impairment charges of $105.0 million in fiscal 2015 compared to $4 million in fiscal 2014.

The company’s net income and EPS rose to $541.0 million and $3.84, respectively, in fiscal 2015 compared to $520.0 million and $3.56, respectively, in fiscal 2014. It reported non-GAAP EPS of $4.29 in fiscal 2015, a rise of 19.8% YoY.

Foot Locker’s cash and cash equivalents and merchandise inventories rose by 5.6% and 2.8%, respectively, in fiscal 2015. Its current ratio and debt-to-equity ratio rose to 3.7x and 0.48x, respectively, in fiscal 2015 compared to 3.5x and 0.43x, respectively, in fiscal 2014.

In the next part of the series, we’ll look at TreeHouse Foods (THS).

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