Foot Locker (NYSE:FL) shares fell 2% in pre-market today after Baird analysts lowered the price target for the stock to $27.00 from $35.00, while maintaining a Neutral rating.
The analysts initiated a short-term bearish trading call through November, citing increased near-term risks despite the stock’s 9% rise since July. The recent optimism, fueled by improvements in full-priced sales and potential long-term margin recovery, contrasts with signs of volatility in sales performance, particularly weak September indicators following a stronger back-to-school season. Additional uncertainties include a shorter holiday shopping season this year and potential marketplace adjustments linked to Nike’s upcoming leadership change.
The analysts cautioned that these factors could push Foot Locker’s stock down toward the low $20s in the near term, applying a reduced forward P/E ratio of 12.5-13X to revised estimates, signaling a less favorable short-term outlook.