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Foot Locker (FL) Stock Sinks As Market Gains: What You Should Know

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In the latest trading session, Foot Locker (FL - Free Report) closed at $58.14, marking a -0.92% move from the previous day. This change lagged the S&P 500's daily gain of 0.2%.

Prior to today's trading, shares of the shoe store had lost 2.35% over the past month. This has lagged the Retail-Wholesale sector's gain of 0.42% and the S&P 500's gain of 3.28% in that time.

Wall Street will be looking for positivity from FL as it approaches its next earnings report date. In that report, analysts expect FL to post earnings of $1.09 per share. This would mark year-over-year growth of 53.52%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.97 billion, down 5.08% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.78 per share and revenue of $8.4 billion, which would represent changes of +105.69% and +11.23%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for FL. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. FL is currently a Zacks Rank #1 (Strong Buy).

Investors should also note FL's current valuation metrics, including its Forward P/E ratio of 10.16. For comparison, its industry has an average Forward P/E of 16.72, which means FL is trading at a discount to the group.

It is also worth noting that FL currently has a PEG ratio of 2.55. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Retail - Apparel and Shoes industry currently had an average PEG ratio of 1.25 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This group has a Zacks Industry Rank of 25, putting it in the top 10% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.


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