Brean Capital Cuts Price Target on Foot Locker (FL) as Shares Trade Down Following 1Q Results

Brean Capital maintained a Buy rating on Foot Locker (NYSE: FL), and cut the price target to $66.00 (from $78.00), following the company's 1Q earnings report. Shares traded down more than -6% Friday, as FL's reported comps of +2.9% came in below the consensus expectations of +4.1%. FL reported EPS of $1.39, a penny above Brean Capital's $1.38, and in line with consensus estimates.

Analyst Eric Tracy commented, "Shares of FL traded down more than -6% Friday, as reported comps of +2.9% came in below both our / cons expectations for +3.5%/+4.1% and investor expectations (peg in the 3%-5% range). While we would have liked to see FY16 estimates de-risked, mgmt reiterated expectations for +MSD full year comps/+DD EPS growth (quarterly comp cadence expected to be relatively balanced, even as QTD comps trending -neg on Jordan launch calendar shift), with some of the retrenchment likely reflecting investor skepticism around prospect of comp re-acceleration, in our view. We stay constructive here, predicated on 1) mgmt. execution to re-accelerate comp, and 2) discounted valuation (shares trade at 11x our lowered FY17 EPS of $5.03, which we note is below mgmt. guide for EPS +DD). We maintain our Buy rating, lower TP to $66, now 13x our FY17 EPS estimate (15x prior), reflecting heightened risks to story."

For an analyst ratings summary and ratings history on Foot Locker click here. For more ratings news on Foot Locker click here.

Shares of Foot Locker closed at $54.77 yesterday.

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