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How Analysts View Foot Locker after Its Fiscal 4Q17 Results

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Mar. 8 2018, Updated 10:33 a.m. ET

Rating summary

As of March 6, 2018, most of the analysts covering Foot Locker (FL) have maintained “buy” ratings on its stock. 

Of the 21 analysts covering Foot Locker stock, 57.0% have recommended “buys,” 33.0% have recommended “holds,” and 10.0% have recommended “sells.”

Foot Locker reported mixed fiscal 4Q17 results on March 2, 2018. Its adjusted EPS (earnings per share) beat analysts’ consensus estimate, but its sales missed analysts’ estimate, sending its stock tumbling 12.7% on the day.

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Following the company’s results, Cowen cut its target price for Foot Locker stock to $43.00 from $54.00, and Telsey Advisory Group revised its target price to $49.00 from $56.00. Canaccord Genuity cut its target price to $66.00 from $67.00. Susquehanna cut its target price to $57.00 from $70.00. Jefferies cut its target price on FL to $55.00 from $61.00.

Currently, analysts’ 12-month average target price for the company is $51.68, which reflects a 22.8% upside to its stock price as of March 6, 2018.

Where do FL’s peers stand?

Of the 14 analysts covering DSW (DSW), ~29.0% have given it “buy” ratings, and the remaining analysts have given it “hold” ratings. Of the 15 analysts covering Finish Line (FINL), ~13.0% have given it “buy” ratings, while 67.0% have given it “hold” ratings. Skechers (SKX) has received “buy” ratings from 100.0% of the analysts covering its stock.

Currently, analysts’ target price for DSW is $21.85, reflecting a 13.3% upside to the stock’s price as of March 6. Finish Line’s mean target price is $12.67, which indicates a 15.7% upside to its stock price as of March 6. Skechers’s target price is $48.22, implying a 17.1% upside to its stock price as of March 6.

Valuation overview

On March 6, Foot Locker was trading at a 12-month forward PE (price-to-earnings) ratio of 9.3x. Foot Locker is trading at a lower valuation multiple compared to its peers. 

On March 6, Foot Locker, Finish Line, DSW, and Skechers were trading at 12-month forward PE ratios of 14.2x, 14.9x, ~12.0x, and 17.5x, respectively.

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