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Foot Locker (FL) Gains But Lags Market: What You Should Know

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Foot Locker (FL - Free Report) closed at $61.20 in the latest trading session, marking a +0.99% move from the prior day. This change lagged the S&P 500's 1.16% gain on the day. Elsewhere, the Dow gained 1.27%, while the tech-heavy Nasdaq added 1.29%.

Coming into today, shares of the shoe store had gained 1.81% in the past month. In that same time, the Retail-Wholesale sector gained 3.18%, while the S&P 500 gained 1.92%.

FL will be looking to display strength as it nears its next earnings release. On that day, FL is projected to report earnings of $1.63 per share, which would represent year-over-year growth of 12.41%. Meanwhile, our latest consensus estimate is calling for revenue of $2.09 billion, up 3.42% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $5.20 per share and revenue of $8.26 billion, which would represent changes of +10.4% and +4.04%, respectively, from the prior year.

It is also important to note the 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.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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 has moved 6.2% higher. FL currently has a Zacks Rank of #1 (Strong Buy).

Valuation is also important, so investors should note that FL has a Forward P/E ratio of 11.65 right now. Its industry sports an average Forward P/E of 13.04, so we one might conclude that FL is trading at a discount comparatively.

Also, we should mention that FL has a PEG ratio of 1.27. 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. FL's industry had an average PEG ratio of 1.29 as of yesterday's close.

The Retail - Apparel and Shoes industry is part of the Retail-Wholesale sector. This industry currently has a Zacks Industry Rank of 152, which puts it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. 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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