© Reuters. Foot Locker’s (FL) US business has worsened, ‘struggles are continuing’ – Williams Trading
Williams Trading analysts upgraded shares of Foot Locker (NYSE:) to Hold from Sell, lowering the price target on the stock to $23 from $25 in a research note Friday.
The analysts told investors the upgrade is based on the stock’s valuation, with FL shares down more than 33% this year.
“Our checks indicate that FL’s business in the U.S. has worsened, but our internal rules do not permit us to maintain our Sell rating,” they explained.
FL is set to report its 2Q23 earnings on Wednesday, August 23, before the open, and the firm expects the sportswear and footwear retailer to cut FY23 guidance once again.
“FL’s struggles are continuing, and appear to be worsening,” the analysts wrote. “Nike (NKE-Sell-$95 PT) sales are likely worse than expected, as assortments lack the needed amount of compelling marquee product. Sales from other brands, most notably Adidas (ADS-BER/NR) are not, in total, delivering what’s needed.”
“Also, FL’s decision to not sell Yeezy shoes, when they were recently offered by Adidas, was needed because of the stance FL took when Adidas originally pulled Yeezy’s from the market. While honorable, FL likely lost share, that arguably it could ill afford, to its competitors,” they added.
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