Morgan Stanley analyst Alexandra Straton maintained a Sell rating on Foot Locker (FL – Research Report) yesterday and set a price target of $16.00.
Alexandra Straton’s rating is based on a combination of factors that suggest a cautious outlook for Foot Locker. Despite the company’s fourth-quarter earnings surpassing expectations, the guidance for the fiscal year fell short of market predictions, indicating potential challenges ahead. Straton expresses skepticism about the company’s ability to achieve its projected improvements in sales and profitability in the second half of the year, reminiscent of similar doubts from the previous year.
Additionally, Foot Locker faces structural challenges such as its reliance on mall locations, a large physical store presence, and low eCommerce penetration, which may hinder its competitive positioning. The uncertain impacts of its relationship with Nike, promotional strategies, and investment plans further contribute to the uncertainty surrounding its future performance. These factors, combined with a price target that suggests limited downside from current levels, underpin Straton’s decision to maintain a Sell rating on the stock.
In another report released on February 18, Goldman Sachs also maintained a Sell rating on the stock with a $21.00 price target.
Based on the recent corporate insider activity of 30 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of FL in relation to earlier this year.
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