Save from as low as €40 per month Change modify pause
Foot Locker reported results for Q119 (Year-end Jan 2019), which were better than expected and the shares rallied over 20% on the day closing at $55.74 which is above our $50 price target.
Management managed to beat both sales and earnings estimates after managing to reduce the Group’s inventory levels. The drop in comparable-store sales also declined less than the market expected.
The Good about Foot Locker
Valuation
However, at this stage we feel reluctant to raise the price target further than $50 per share due to the fact that the Company still has hurdles it needs to overcome before we can justify an improvement in our price target.
We also believe that the current P/E of 13x is already pricing in future improvements and surprises, which may come out in FY2019.
The market is expecting an earnings per share figure of $4.51 and $4.87 for financial year 2019 and 2020 respectively. Using a forward P/E multiple of 11x, this would translate into a price target of $53.57 which is below the current price.
We suggest selling out of the shares at these levels.
About Foot Locker
Foot Locker Retail, Inc. is an American sportswear and footwear retailer, with its headquarters in Midtown Manhattan, New York City, and operating in 28 countries worldwide.
The company operates the eponymous “Foot Locker” chain of athletic footwear retail outlets (along with “Kids Foot Locker” and “Lady Foot Locker” stores), and other athletic-based divisions including Champs Sports, Footaction USA, House of Hoops, and Eastbay/Footlocker.com, which owns the rights to Final Score. The company is also famous for its employees' uniforms at its flagship Foot Locker chain, resembling those of referees.
You are signing up to receive news, updates, general market announcement, articles and product or service marketing. By signing up you are consenting to our privacy policy and can unsubscribe at any time.