Will This Price Target Increase Help Foot Locker (FL) Stock Today?

NEW YORK (TheStreet) -- Footlocker (FL) had its price target raised to $54 from $51 by analysts at UBS AG (UBS) on Tuesday following a first quarter earnings report that beat analysts expectations.

The sneaker retailer reported a 17.4% jump in profits from the year ago period to $162 million while revenue grew 14% to $1.87 billion.

UBS also raised the company's full year EPS guidance to $3.31 per diluted share from $3.25 per share as a result of the promising first quarter.

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Separately, TheStreet Ratings team rates FOOT LOCKER INC as a Buy with a ratings score of A+. TheStreet Ratings Team has this to say about their recommendation:

"We rate FOOT LOCKER INC (FL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and attractive valuation levels. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • FL's revenue growth has slightly outpaced the industry average of 3.4%. Since the same quarter one year prior, revenues slightly increased by 4.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • FL's debt-to-equity ratio is very low at 0.06 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, FL has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 34.44% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, FL should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • FOOT LOCKER INC has improved earnings per share by 19.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, FOOT LOCKER INC increased its bottom line by earning $2.85 versus $2.59 in the prior year. This year, the market expects an improvement in earnings ($3.24 versus $2.85).
  • You can view the full analysis from the report here: FL Ratings Report
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