Foot Locker Stock Flaunts Double Upgrade

The firm also raised its price target to $50 from $20

Assistant Editor
Oct 13, 2020 at 9:18 AM
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The shares of Foot Locker, Inc. (NYSE:FL) are up 4.8% at $39.38 in pre-market trading, after BofA Global Research chimed in with a double upgrade to "buy" from "underperform," with an added price-target hike to $50 from $20. The firm cited strong sales for Nike (NKE), and expects that momentum to keep going through the holiday season. 

Today's pop has Foot Locker stock breaking out of recent pressure just below the $39 level, which it hasn't traded above since late February. Also, the stock just surpassed its year-to-date breakeven mark.

There is still plenty of room for more bull notes, as coming into today, 11 of the 18 analysts in coverage sport a "hold" or worse rating on FL. Furthermore, the 12-month consensus price target of $34.91 is a 7.1% discount to current levels. 

The options pits, however, have appeared to be much more confident. This is per FL's 50-day call/put volume ratio of 3.19 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). This ratio stands higher than 90% of readings from the past year, meaning long calls have been picked up at a much faster-than-usual rate in the past 10 weeks. 

Also worth noting, though short interest has started to drop, which could have created some tailwinds, the 9.15 million share sold short still account for 9.4% of the stock's available float. In other words, it would take three days for short sellers to buy back these bearish bets, at FL's average pace of trading. 

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