One Analyst Wonders Out Loud Why Foot Locker Has 2,300 Sneaker Stores
Foot Locker's reliance on Nike could threaten its 'historical moat' in footwear, as Nike prepares to sell directly on Amazon.com.

Oppenheimer analysts Anna Andreeva and Samantha Lanman initiated coverage of Foot Locker's stock on Friday with a "Perform" rating, arguing the retailer has too many stores and competition to be considered a "Buy."

The analysts caution investors that they worry Foot Locker relies too heavily on Nike Inc.  ( NKE) , and while its valuation has decreased, earnings estimates have also moved lower.

"While valuation has compressed and athletic is still a relatively better place to be, with 2,300 mall-based stores across various banners targeting a largely similar consumer, FL could just be starting to be impacted by traffic volatility (first quarter of negative traffic in 1Q17)," they noted.

Furthermore, its reliance on Nike could threaten its "historical moat" in footwear, as Nike prepares to sell directly on Amazon.com ( AMZN) .

Shares of Foot Locker closed down 0.22% to $49.98 per share on Friday. 

What's Hot On TheStreet

The biggest deal-maker around strikes again: Berkshire Hathaway Energy, a division of Warren Buffett's Berkshire Hathaway Inc., (BRK.A) (BRK.B) , confirmed Friday that it will purchase Oncor Electric Delivery Co. LLC in a deal that values the bankrupt unit's equity at $11.25 billion. "Oncor is an excellent fit for Berkshire Hathaway, and we are pleased to make another long-term investment in Texas - when we invest in Texas, we invest big!", Buffett said in a statement. "Oncor is a great company with similar values and outstanding assets."

Clearly, Buffett is still bullish on America's future. TheStreet takes a look at the billionaire's biggest bets on America.

Who cares, Elon: Tesla (TSLA) agreed to build the world's largest lithium-ion battery park in South Australia on Friday, signing off on a deal to finish the installation within 100 days or give it away for free. Failure to deliver the project on time would cost his company about $50 million, said CEO Elon Musk, though neither the state government nor Tesla released details of the contract.

Meanwhile, Tesla's stock is in a bear market. The company's highly anticipated first Model 3 electric cars will begin production on Friday.

Qualcomm battle with Apple gets even nastier: Qualcomm (QCOM) added a couple of unexpected wrinkles into its legal salvo with Apple (AAPL) , TheStreet's tech columnit Eric Jhonsa says. One of these wrinkles aims to neutralize some of the legal arguments Apple, as well as certain regulators, have been making against Qualcomm. The other, says Jhonsa, aims to both lower the odds of a political intervention in Apple's favor, as well as boost Qualcomm's near-term chip sales at Intel Corp.'s (INTC) expense.

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

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