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Foot Locker’s Price Target Boosted at FBR Capital (FL)

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.

Be sure to visit our complete recommended list of the Best Dividend Stocks , as well as a detailed explanation of our ratings system here .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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