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Foot Locker A Top Pick At Susquehanna, Initiated At Positive

Susquehanna analysts Sam Poser and Renato Basanta initiated coverage on Foot Locker, Inc. (NYSE: FL) with a Positive rating, which comes ahead of the second quarter earnings results scheduled for August 19. The brokerage kept a price tag of $73 on the optimist side and $51 on the pessimistic side if the company failed to deliver expected same-store sales in the second quarter.

The brokerage attributed the rating to the never-ending strength in athletic and casual athletic footwear. The analysts felt there were changes in product preference fueled by innovation apart from the pricing attached to some products.

Susquehanna believes the weakness suffered by Nike (NYSE: NKE) wouldn't hurt the basketball category as a whole, citing the case of Under Armour's (NYSE: UA) Curry styles and Nike's Kyrie and Kobe styles.

The brokerage believes Foot Locker is the best mall-based athletic specialty retailer. Therefore, the analysts expect the company to gain in share at the cost of its rival. Their confidence is based on management's tactics of enhancing the business through measured and practical way.

"We dismiss the concerns by some that Nike will grow its direct to consumer business to the detriment of Foot Locker. We also dismiss the notion of as goes the basketball business, so goes Foot Locker," the analysts wrote in a note.

Shares of the company traded higher by $0.75, or 1.24 percent, to $61.10.

Aug 2016SusquehannaInitiates Coverage onPositive
Aug 2016B. RileyUpgradesNeutralBuy
Aug 2016OTR GLobalDowngradesPositiveMixed

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