Foot Locker Inc (NYSE: FL) is up nearly 10% on Thursday after a Piper Sandler analyst issued a bullish note in its favour.
Foot Locker stock has upside to $33Abbie Zvejnieks upgraded the footwear retailer today to “overweight” and raised her price target to $33 which suggests a 16% upside on its previous close.
The analyst is constructive on Foot Locker stock primarily because she expects the sportswear company to expand its margins in 2024. Her research note reads:
We have heard some early commentary that the lower income consumer may be beginning to recover from when spending was significantly pressured by inflation.
Earlier this week, the U.S. Bureau of Labour Statistics said inflation stood at 3.1% in November – in line with Dow Jones estimates (find out more).
Apparel is showing signs of deflationAbbie Zvejnieks is bullish because the apparel category is starting to show some signs of deflation as well which she expects will be a material benefit for $FL moving forward.
The Piper Sandler analyst is “incrementally more positive” on Foot Locker stock because he expects new products in the coming year to boost full-priced sales. The company’s inventory levels have been improving at a good pace as well.
Late in November, the New York-headquartered firm reported market-beating results for its third financial quarter and improved its guidance for full-year sales as well.
Note that Foot Locker currently pays a dividend yield of 5.15% which makes up for another good reason to own it.
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