Foot Locker falls as Morgan Stanley turns bearish

Foot Locker

18/07/2024 15:46

** Shares of Foot Locker  FL.N  down 4.1% at $25.37 in early
Thurs trade after Morgan Stanley downgrades specialty athletic
apparel retailer to "underweight" from "equal-weight"
    ** Brokerage chops PT by $6 to $18, implying 32% downside to
stock's last close
    ** Citing "tough" 2H set-up - including more difficult
compares, 53rd-week reversal, election overhang and unfavorable
holiday calendar -  Morgan Stanley says it's cautious on
softlines retail space
    ** FL screens as having among greatest 2H24 estimated EPS
risk in coverage universe, Morgan Stanley says, pointing to
expensive valuation vs historical multiples and mall-based peers
    ** Other reasons for bearish stance include uncertain P&L
impact of the Nike  NKE.N  reset and limited promotion recapture
conviction, brokerage says
    ** On Tues, FL shares rose nearly 9%, getting a boost after
German sportswear maker Adidas  ADSGn.DE  hiked its 2024 profit
guidance
    ** On May 30, FL shares finished up 15% after co posted
qtrly EPS beat as inventories decreased 5.6% yr/yr
    ** Avg rating among 19 analysts covering FL is "hold" and
breakdown of recommendations is 1 "strong buy", 1 "buy", 12
"hold", 4 "sell" and 1 "strong sell" with median PT of $26.50 -
LSEG
    ** With move on the session, shares down 18% YTD

 (Lance Tupper is a Reuters market analyst. The views expressed
are his own)
 ((lance.tupper@thomsonreuters.com
lance.tupper@tr.com 1-646-279-6380))