Analyst Turns Bullish on Foot Locker Stock

Most analysts aren't on board with Foot Locker, though

Assistant Editor
Jul 10, 2020 at 10:00 AM
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The shares of Foot Locker, Inc. (NYSE:FL) are up 1.5% to trade at $28.40, after the retailer received an upgrade to "positive" from "neutral" from Susquehanna. The analyst cited accelerated June sales amid store reopenings, and Foot Locker's strong relationship with Nike (NKE). The brokerage firm added that stimulus money could push consumers to spend more in Foot Locker stores rather than on dining out and travel. 

The majority of analysts, however, aren't totally on board with FL. Coming into today, 11 brokerages called it a tepid "hold." Meanwhile, four rated the equity a "buy" or better, while one lone wolf recommended a "sell." Meanwhile, the consensus 12-month target price of $28.90 is a 1.8% premium to current levels.

During the mid-March broader market pullback, Foot Locker stock dipped to a nearly nine-year low of $17.46 on March 23. The equity briefly rallied off this low before being rejected by its 200-day moving average. The shares have since consolidated between $31 and $27, sporting a year-to-date deficit of 27%. On the bright side, however, FL is up 15% over the last three months with solid support at its 100-day moving average. 

Options traders are favoring calls at the moment. This is per FL's 10-day call/put volume ratio at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) of 3.31, which ranks in the slightly elevated 66th percentile of readings from the past 12 months. 

Lastly, short sellers look like they're taking a breather on Foot Locker stock. Short interest dipped 4.1% in the last two reporting periods, and the 9.48 million shares sold short represent 9.8% of the stock's available float. At FL's average pace of trading, it would take just over three days to cover these bullish bets. 


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