Analyst Update: Foot Locker, Stage Stores, JAKKS Pacific

Analysts adjusted their ratings on Foot Locker, Inc. (FL), Stage Stores Inc (SSI), and JAKKS Pacific, Inc. (JAKK)

by Mark Fightmaster

Published on Aug 20, 2015 at 1:25 PM
Updated on Jun 29, 2020 at 3:45 PM

Analysts are weighing in today on retail concerns Foot Locker, Inc. (NYSE:FL) and  Stage Stores Inc (NYSE:SSI), as well as toymaker JAKKS Pacific, Inc. (NASDAQ:JAKK). Here's a quick roundup of today's brokerage notes on FL, SSI, and JAKK.

  • Yesterday, FL announced that its board of directors declared a quarterly cash dividend of 25 cents per share on its common stock, payable Oct. 30. Today, Barclays upped Foot Locker, Inc.'s price target to $76 from $70 with an "overweight" rating. Although the shares are 2.4% lower at $72.22 this afternoon, the specialty athletic retailer is a very solid long-term performer -- up 28.6% year-to-date, and fresh off Tuesday's all-time high of $74.95. Tomorrow, FL will report quarterly earnings -- and the stock could be poised for some post-earnings volatility. Over the past eight quarters, the retailer has averaged a single-session post-earnings move of 3.5%, and this time around, FL's near-term at-the-money straddle is pricing in a loftier 4.7% swing. Meanwhile, with 9% of the equity's float sold short -- representing 11.5 times the average daily trading volume -- any good news could spark a short-covering rally, which could help FL tag the new price target and all-time highs.

  • SSI isn't faring well, as it has dropped more than 29% to churn near $11.95, and earlier pegged a new five-year low of $11.17. Stage Stores Inc missed second-quarter earnings estimates, lowered its full-year profit forecast, and announced a multi-year plan that will see it close 90 stores. In response to this news, Sterne Agee CRT lowered SSI's price target to $13 from $20 with a "neutral" rating. With SSI hitting a new multi-year low -- it is facing a very large uphill battle on the technical front. Today's meteoric drop entrenched SSI further below its 10-day moving average, which has been instrumental in the stock's longer-term technical struggles.

  • JAKK is more than 4% higher this afternoon at $9.69 after Oppenheimer started coverage of the toymaker at "outperform." The brokerage believes that JAKKS Pacific, Inc.'s profit margins will be "considerably higher" this year, which will more than offset a "sales decline due to lower 'Frozen' merchandise sales." ("Frozen" parent Walt Disney Co (NYSE:DIS), meanwhile, is sinking today following a negative analyst note.)  Turning to the charts, today's rally has the shares facing a familiar foe at the round-number $10 level. The stock has battled with resistance at $10 since topping out at an annual high of $10.19 on July 6, and earlier hit an intraday peak of $9.97. Elsewhere, JAKK's sentiment setup is favorable, as four of the six analysts covering the firm rate it a "hold." Any upgrades from this bunch could push the stock higher. In addition, a massive 61% of JAKK's float is sold short, representing nearly 16 sessions' worth of pent-up buying demand, at the stock's average daily volume. If more well-received news comes the toymaker's way, we could see the bears forced to cash in those losing bets -- which may spark a short-covering rally.

For other stocks in analysts' crosshairs, read Analyst Upgrades: Lumber Liquidators Holdings Inc, NetApp Inc., and Akamai Technologies, Inc. and Analyst Downgrades: Walt Disney Co, Micron Technology, Inc., and Time Warner Inc


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