Has Foot Locker (FL) - Get Report run out of room?

Worse-than-expected results have come in recently from several retailers -- Walmart Stores' (WMT) - Get Report weak results sent the stock lower, for example. And weak retail spending has emerged as a risk for Foot Locker. The New York-based company will report fourth-quarter fiscal 2015 earnings results before the opening bell Friday.

Foot Locker stock, which is up 2.8% year to date, has been a relative outperformer compared to the 6% decline in the S&P 500 (SPX) index and the 1.9% decline in the SPDR S&P Retail ETF (XRT) - Get Report . If Foot Locker exceeds analysts' estimates Friday, the shares may still have room to run.

For the quarter that ended in January, analysts on average expect Foot Locker to earn $1.12 a share on revenue of $2.00 billion, translating to year-over-year growth of 12% and 4.7%, respectively. For the full year, earnings are projected to rise 19% year over year to $4.26 a share, while revenue of $7.41 billion would mark an increase of 3.6% from the year-ago quarter.

Given that Foot Locker's earnings for both the quarter and full year are projected to climb at solid double-digit percentage rates, it would be a mistake to sell Foot Locker stock, especially with the shares still discounted compared to the broader market. The stock is priced at just 18 times earnings, which is two points below the price-to-earnings ratio of 20 for the average stock in the S&P 500 index. Foot Locker's earnings are projected to grow at more than three times the rate of the S&P 500.

As for fiscal 2016? Based on consensus estimates of $4.75 a share, Foot Locker is projected to grow earnings at 11.5%, about twice the projected growth rate of the average stock in the S&P 500 index. Based on those estimates, Foot Locker's forward P/E drops to 14 -- a three-point discount to the average stock in the S&P 500. That would mean Foot Locker stock is substantially discounted now.

Foot Locker stock has a consensus buy rating and an average analyst 12-month price target of $78. Plus the stock pays a 25-cent quarterly dividend that yields 1.48% annually. That's excellent value.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.