Citi Downgrades Foot Locker (FL) to Neutral, 'Losing Their Stripes'

Citi analyst Paul Lejuez downgraded Foot Locker (NYSE: FL) from Buy to Neutral with a price target of $30.00 (from $48.00).

The analyst comments "When we upgraded FL shares from Neutral to Buy on 3/21, we were drawn to FL’s “self-help” story led by a seasoned retail executive who had stabilized the NKE relationship and had plans to expand with other fast-growing brands. What we failed to appreciate was: (1) The economic sensitivity of FL’s customer base, particularly at a time when consumer spending is slowing; (2) How disruptive mgmt’s plans are to the business during a time when the consumer is already price sensitive/tightening their wallet; and (3) How unhealthy the athletic market is in the US. 1Q results brought these issues to the forefront and highlighted how low mgmt’s visibility is into trends in their business. We note that while F23 guidance was lowered significantly, we don’t view it as fully de-risked. For these reasons, we are downgrading shares from Buy to Neutral and lowering our TP from $48 to $30."

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 $30.21 yesterday.

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