In a report released today, Alexandra Straton from Morgan Stanley upgraded Foot Locker (FL – Research Report) to a Hold, with a price target of $24.00.
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Alexandra Straton’s rating is based on several considerations surrounding Foot Locker’s recent acquisition announcement by DKS. The acquisition price of $24 per share represents a significant premium over Foot Locker’s recent trading prices, yet it is still below its long-term highs. This suggests that while the deal is beneficial for shareholders in terms of immediate value, it may not fully reflect the potential for future growth or turnaround.
Straton has been skeptical about Foot Locker’s ability to successfully execute a turnaround strategy, citing challenges such as its reliance on mall-based stores, low eCommerce penetration, and potential risks in its relationship with Nike. These factors contribute to a view that the acquisition price is relatively high given the company’s current challenges. As a result, Straton has upgraded Foot Locker to an Equal-weight rating with a price target of $24, reflecting a cautious stance on the company’s future prospects.
According to TipRanks, Straton is a 4-star analyst with an average return of 8.8% and a 66.67% success rate. Straton covers the Consumer Cyclical sector, focusing on stocks such as On Holding AG, Foot Locker, and Lululemon Athletica.
In another report released today, Needham also downgraded the stock to a Hold with a $24.00 price target.