Brean Capital Remains Bullish on Foot Locker (FL) After Meeting with Management
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Brean Capital reiterated a Buy rating and $77.00 price target on Foot Locker (NYSE: FL) after hosting investor meetings with management. Brean came away from the meeting with more confidence in the company's ability to sustain its top-line.
Analyst Eric Tracy commented, "Yesterday, we had the opportunity to host investor meetings w/ FL President & CEO Dick Johnson and VP, Treasurer & Investor Relations, John Maurer. While FL's ability to deliver on FY16 guide for comps +MSD/ EPS +DD has long been a key tenet of our constructive thesis, we came away from meetings incrementally convicted with top-line sustainability given 1) more diversified operating model that limits (especially relative to historical) over-reliance on any one category/ brand, 2) enhanced visibility into 2H product pipeline (even absent intro of revolutionary platform), 3) vendor supply chain enhancements that can drive faster speed to market over the LT, supporting greater merchant flexibility in aligning assortments w/ shifting consumer preferences, and 4) opportunity in apparel, women's biz. Accordingly, while our estimates are unchanged, we are maintaining our Buy rating and $77 TP, still based on shares trading at 15x our FY17 EPS estimate of $5.14."
Shares of Foot Locker closed at $68.22 yesterday.
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