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)

Aug 20, 2015 at 1:25 PM
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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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