DA Davidson Starts Foot Locker (FL) at Neutral; Positive Outlook Adequately Reflected in Valuation

DA Davidson initiates coverage on Foot Locker (NYSE: FL) with a Neutral. PT $24.00.

DA analyst says, "With approximately 3,400 stores and over $5 billion of global sales, Foot Locker is a leading player in the athletic footwear market. The company's domestic footwear business is roughly 3x the size of the closest competitor."

"Recently trading at 10.8x our FY12 EPS estimate, FL's valuation is slightly below peer averages. Despite faster earnings growth than its closest competitor and improving profitability, FL's margins and rate of return on invested capital are still comparatively much lower, something we feel should be reflected in the valuation."

For more ratings news on Foot Locker click here and for the rating history of Foot Locker click here.

Shares of Foot Locker closed at $21.43 yesterday.

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