Foot Locker Stock Extends Slide Ahead of Earnings

FL has a history of negative post-earnings reactions

Deputy Editor
Aug 18, 2020 at 2:13 PM
facebook X logo linkedin

The shares of Foot Locker, Inc. (NYSE:FL) are down 3% at $27.54 this afternoon, on track for its fifth straight loss. The slide comes just a few days ahead of the company's second-quarter earnings report, due before the open on Friday, August 21. Below, we will take a look at how the stock has performed on the charts of late, and explore some of the options activity surrounding FL ahead of the event.  

Digging deeper, the equity has recovered fairly well from its mid-March, nine-year lows below the $18 level. Despite a 39% 2020 deficit, the summer months have seen FL trade in a tight range between the $26.50 and $30 levels, with its 100-day moving average emerging as support.

FL Chart August 18

Analysts aren't particularly optimistic toward the equity. Of the 17 in coverage, just five sport a "buy" or better rating. Meanwhile, the stock's 12-month consensus target price of $32.27 is a 17.2% premium to current levels, suggesting a storm of bear notes could be in order should the company's corporate report disappoint. 

There is, however, some optimism in the options pits, where calls are handily outpacing puts. In fact, Foot Locker stock sports a 10-day call/put volume ratio of 4.04 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which ranks in the slightly elevated 82nd percentile of its annual range. This suggests a healthier-than-usual appetite for long calls at the moment.

A look at the equity's history of post-earnings reactions over the past two years shows a series of lackluster responses. In its last eight reports, five of these next-day sessions were lower, including an 18.9% slide in August 2018 and a 16% drop in May 2019. The security averaged a post-earnings swing of 10.5% the last eight quarters, regardless of direction. This time around, the options market is pricing in a similar move of 12.4%. 


Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on calls
238.5% GAIN on Oracle calls



Rainmaker Ads CGI