Brean Capital reiterated a Buy rating on Foot Locker (NYSE: FL), and raised the price target to $78.00 (from $77.00), following the company's 4Q earnings report. FL reported EPS of $1.16 favorable to consensus estimates of $1.12, driven by operating leverage on strong comp growth of 7.9%, as well as continued growth in merchandise margin expansion.

Analyst Eric Tracy commented, "As we expected, FL delivered 4Q upside against high expectations/tough compares, with comp and EPS growth coming in favorable to our/cons expectations. We also thought shares might come under pressure at the print (down 4% post-qtr) on high 4Q market expectations and a misread on likely 1Q QTD comp decel (as we expected up +LSD) as evidence of slowing momentum overall. As we highlighted in our preview, we believe this decel is actually reflective of timing headwinds (tax refunds, launch calendar shifts) that should reverse as we move through 1Q, and are therefore buyers on the share weakness. Longer term, we continue to like the FL story, with our positive view predicated on (1) cont. superior product allocation/vendor pipeline refresh that supports comps (against very difficult multi-yr compares), (2) allowing for continued leverage of buying/occupancy costs and SG&A, while (3) ongoing structural improvements to the model (closing underperforming doors, enhanced planning/allocation, merchandise flow initiatives, and inventory management) also aid in margin expansion beyond peak levels, and FL's strong financial position ($7.37/share in cash) should continue to support shareholderfriendly moves. Our FY16 estimates are largely unchanged, we tweak our TP slightly higher to $78, now 15x our FY17 EPS estimate of $5.21."

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Shares of Foot Locker closed at $64.14 yesterday.