Foot Locker (FL) PT Raised, Estimates Bumped Higher at Piper Jaffray

Piper Jaffray analyst Erinn Murphy bumped estimates and her price target on Neutral-rated Foot Locker (NYSE: FL) to $60.00 (from $59.00) following strong Q1 results. The firm is maintaining a neutral rating on valuation.

Murphy commented, "We are updating our model and maintaining our Neutral rating following the company's Q1 results. Remarkable execution continues as: 1) running and basketball were up mid-teens and LDD, respectively; 2) e-commerce banners accelerated Q/Q & Y/Y to nearly 50% growth; 3) merchandise margins were up 20 bps Y/Y ex. FX on lower IMU mix & markdown pressure; and 4) sales growth outpaced inventory by >500 bps ex. FX. Q1 comps were +7.8% vs. the Street's 5.5% and comps are tracking +DD QTD, but guided to finish +MSD owing to launch timing. Overall, FY16 guidance of +MSD comps, flat to slight gross margin expansion and +DD EPS growth were reiterated, but appear conservative. We are lifting our PT from $59 to $60 based on 15x (unchanged) our new FY16E EPS, but remain Neutral tied to near-peak valuation and peak productivity."

The firm raised FY16E EPS from $3.93 to $4.02 and raised FY17E EPS from $4.34 to $4.46.

For an analyst ratings summary and ratings history on Foot Locker click here. For more ratings news on Foot Locker click here.

Shares of Foot Locker closed at $64.00 yesterday.

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