Sterne Agee CRT Reiterates Buy on Foot Locker (FL); Says Sell-Off is Unwarranted
Sterne Agee CRT reiterated a Buy rating and $85.00 price target on Foot Locker (NYSE: FL) following an 8% drop in the market on Friday. Analyst Sam Poser believes that the sell off is unwarranted. Industry checks indicate that in malls where a Nike (NYSE: NKE) store opens, business at other retailers that carry the Nike brand improves. Nike uses each of its wholesale partners to build the Nike brand. Nike knows that Foot Locker provides a great platform to enhance the Nike brand.
Poser commented, "FL's 8% drop on Friday was unwarranted. According to VFC Friday, the Timberland business increased 40% in North America during 3Q, which is certainly good for Foot Locker, as the port delays hurt the Timberland business last year. Also, Foot Locker and Skechers are not even distant cousins. The store concepts of Foot Locker Inc. are integral to Nike's long-term growth plans. Foot Locker's Six:02 women's concept was called out by Nike, at the recent investor day, as a key retailer to help expand Nike's women's business. Nike knows that Foot Locker provides a great platform to enhance the Nike brand. Investments in House of Hoops, Flight 23, and Kid's Zone shops would not be happening if Nike was planning to put the kibosh on Foot Locker."
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Shares of Foot Locker closed at $63.61 yesterday.