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Analysts Bench Foot Locker for Missing Fiscal 2Q17 Targets

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Aug. 24 2017, Updated 1:07 p.m. ET

Recent analyst actions on Foot Locker

As Foot Locker (FL) posted a disappointing fiscal 2Q17, Wall Street analysts did not shy away from cutting the company’s ratings and target price. As many as eight analysts downgraded the company after its results, and other analysts lowered their price targets.

On August 18, six brokers lowered Foot Locker’s rating, citing a weak second quarter and no near-term signs of improvement:

  • Canaccord Genuity lowered Foot Locker to a “hold” while cutting its target price to $39 from $64.
  • Deutsche Bank also reduced FL to a “hold” while reducing the target price to $49 from $72.
  • J.P. Morgan downgraded Foot Locker to “neutral,” reducing the price target to $37.
  • Telsey Advisory lowered FL stock to “market perform,” reducing its price target to $36 from $60.
  • Wells Fargo cut Foot Locker from “outperform” to “market perform,” assigning a price target of $37.
  • Bank of America lowered Foot Locker from a “neutral” to an “underperform” rating.

On August 21, 2017, UBS and Baird downgraded Foot Locker (FL) to a “neutral” rating. UBS also downgraded competitor Finish Line (FINL).

Analyst Michael Binetti of UBS noted that Foot Locker’s results were significantly below expectations. He added that this trend made it “tougher to support a thesis that athletic retailers will be able to sidestep emerging structural challenges.”

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Analysts cut their price target on FL stock

Most of the Wall Street analysts covering Foot Locker stock reacted with target price cuts of 30%–50%. Barclays lowered FL’s price target to $50, Wedbush lowered it to $45 from $66, and Citigroup reduced it to $40 from $81. FBR cut it to $40 from $58, and Jefferies lowered its price to $61 from $80.

Investors looking for diversified exposure to Foot Locker could consider the iShares Edge MSCI Multifactor Consumer Discretionary ETF (CNDF), which invests 1.4% of its portfolio in the company.

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