Canaccord Genuity Raised Price Target on Foot Locker (FL) Following Q1 Results

Canaccord Genuity reiterates a Buy rating on Foot Locker (NYSE: FL), and raised the price target to $72.00 (from $70.00), following Q1 results. FL reported Q1 EPS results of $1.29 (vs. $1.24 estimates).

Analyst Camilo Lyon commented on FL, saying, "FL reported solid Q1 results of $1.29 vs. our $1.24 with all key metrics coming ahead of our estimates. Comps of 7.8% vs. our 4.5% were outstanding (driven mainly by ticket and conversion) while gross margin of 35% (+40bps vs. our +22bps est.) was also solid (+1c). The company controlled its expenses well (+4c) as SG&A dollar growth was -2.8% (vs. our +1% est.). All in all, FL started the year with strong momentum that has carried
into Q2 with QTD comps +LDD. That said, FL did not change its full year guidance (we believe due to conservatism more than anything else). Recall, FL typically does not change full year comp/EPS guidance after Q1, nor did we expect them to do so this quarter. While some are calling for the end of the athletic cycle (or at least the top), we are of the opinion that FL will continue to execute well and the stock will grind higher, much as it has the past couple of years. With overall category trends continuing to favor FL, coupled with internal dynamics that can help sustain solid MSD + comp growth, a healthy balance sheet ($6/share in net cash) to support a consistent buyback, and an inexpensive valuation of 15x P/E, we reiterate our BUY rating."

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 $63.46 yesterday.

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