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Wedbush Rated Foot Locker as ‘Outperform’

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Nov. 3 2016, Published 4:25 p.m. ET

Price movement

Foot Locker (FL) has a market cap of $8.8 billion. It rose 2.1% to close at $67.18 per share on November 2, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were -2.4%, 0.67%, and 5.0%, respectively, on the same day. FL is trading 1.2% below its 20-day moving average, 0.38% above its 50-day moving average, and 8.7% above its 200-day moving average.

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Related ETFs and peers

The Schwab US Mid-Cap ETF (SCHM) invests 0.33% of its holdings in Foot Locker. The ETF tracks a market-cap-weighted index of mid-cap stocks in the Dow Jones US Total Stock Market Index. The YTD price movement of SCHM was 4.2% on November 2.

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

  • Wal-Mart Stores (WMT): $214.1 billion
  • DSW (DSW): $1.7 billion

Foot Locker’s rating

On November 2, 2016, Wedbush has initiated the coverage of Foot Locker with an “outperform” rating and also set the stock’s price target at $80.0 per share.

Performance of Foot Locker in fiscal 2Q16

Foot Locker reported fiscal 2Q16 sales of $1.8 billion, a rise of 5.9% compared to sales of $1.7 billion in fiscal 2Q15. The company’s cost of sales as a percentage of sales rose 3.0% in fiscal 2Q16 compared to the prior-year period.

Its net income and EPS (earnings per share) rose to $127.0 million and $0.94, respectively, in fiscal 2Q16 compared to $119.0 million and $0.84, respectively, in fiscal 2Q15.

FL’s cash and cash equivalents fell 2.6%, and its merchandise inventories rose 1.7% in fiscal 2Q16 compared to the prior-year period. Its current ratio and debt-to-equity ratio rose to 3.8x and 0.46x, respectively, in fiscal 2Q16 compared to 3.4x and 0.44x, respectively, in fiscal 2Q15.

Now we’ll look at Ford Motor (F).

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