Athletic footwear retailer Foot Locker, Inc. ( FL ) on Friday saw its price target raised by analysts at FBR Capital Markets following a recent meeting with company management.
The firm maintained its "Outperform/Top Pick" rating on FL and boosted its price target to $28. That new target suggests a 17% upside from the stock's Thursday closing price of $23.87.
An FBR analyst commented, "Summary takeaways from meetings with management. Key points of discussion in our meetings focused on (1) merchandising/health of the product cycle in footwear, (2) long-term plan/goals in light of recent performance, (3) structural levers that could support above-peak margin trajectory, (4) accretive growth vehicles (international, new concepts, e-commerce), (5) strategic investments (systems, training, infrastructure), (6) potential headwinds -inflationary pressures, NBA/NFL lockout, and (7) deployment of cash."
"Our FY11 EPS estimate remains intact at $1.54, and assumes a +6% comp and operating margin of 7.2%, implying +40% YOY earnings growth. Our 2Q EPS estimate of $0.12 (versus $0.04 last year) assumes a +6% comp, below current quarter-to-date trends. Our FY12 EPS estimate is also intact at $1.77 (+15% YOY)."
Foot Locker shares were mostly flat in premarket trading Friday.
The Bottom Line
Shares of Foot Locker ( FL ) have a 2.76% dividend yield, based on last night's closing stock price of $23.87. The stock has technical support in the $20-$22 price area. If the shares can firm up, we see overhead resistance around the $25-$26 price levels.
Foot Locker, Inc. ( FL ) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.
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