It wasn't exactly great news for Foot Locker (NYSE:FL) when most stores were required to close as the early days of the coronavirus pandemic started kicking in. However, Foot Locker was prepared on some levels, and though it took a few losses with removed foot traffic into stores, the company managed to get through the worst of it intact. Now, new reports say analysts are taking another look at Foot Locker stock, and perhaps you should as well.
The Analyst Picture Jumps Out
The biggest news for Foot Locker immediately is that Argus Research recently upgraded its outlook on Foot Locker shares, taking them up from “hold” to “buy”. Argus Research noted that not only was foot traffic starting to come back to Foot Locker, but that the foot traffic in question was clearly in a buying mood. Such a move would help Foot Locker readily get back to pre-COVID sales levels, which these days is a downright aspirational development.
That's not all, either; with the recent change from Argus Research, there's a growing consensus toward buying in on Foot Locker. Our own research notes that there are currently 18 analysts with recommendations on Foot Locker. That's actually down three from the levels seen 30 days ago, oddly, but the ones who are still around are clearly interested in Foot Locker.
Right now, only one analyst has a “sell” rating on Foot Locker, while seven have “hold” ratings and the remaining 10 have “buy” ratings. This puts the consensus recommendation up to buy, which isn't a surprise given what we're seeing so far.
Better yet, recent measures taken by Investor's Business Daily have increased Foot Locker's Relative Strength Rating from 70 to 73, a move which reflects growing strength in the market and a better chance at improved outcomes. While the best-performing stocks have a rating over 80, reports note, the gain from 70 to 73 is nonetheless a good sign. Hedge funds are interested as well, though not as interested as they once were; it's currently part of 29 hedge fund portfolios as of the end of June, though the all-time high is 38. However, given there were 21 hedge funds holding Foot Locker at the end of March, a buying mood seems to be coming back.
In an odd note, the consensus price target for Foot Locker is $32.44, with recent individual price targets ranging from a pessimistic $29 at UBS Group and a slightly more optimistic $38 from Goldman Sachs. Given that the stock is currently trading at $36.46, there's not a lot of room left before price targets either have to be revised upward or the stock itself falls back to better reflect the consensus.
Reasons to Stick Around
Foot Locker, for its part, is putting together a string of reasons designed to keep both return shoppers and current investors interested in its overall offering. Perhaps its biggest plan right now is social involvement and good corporate citizenship. Just a couple weeks ago, the company donated $1.5 million in footwear to Soles4Souls, a charity devoted to putting shoes on the feet of those who are without shoes currently. This donation will, in particular, target children who are in need of new shoes to go back to school, assuming school isn't online-only where they are.
In that vein, Foot Locker is also throwing its...shoe...into the election ring. Foot Locker stores are set to serve as voter registration operations starting next week. It's a collaborative effort with Rock The Vote, and, via displays set up at 2,100 Foot Locker and associated locations, shoppers will be able to check their voting status, get information about polling places and the like, and even register to vote directly if such hasn't happened already.
New Products, New Responsibility, New Opportunity
Foot Locker isn't trying to just advance its sales through social responsibility; it's also bringing in new products. One recently-announced collaborative effort is between Anderson Bluu and Converse, which will feature a new line of white Chuck Taylors covered with lemon and leaf-themed decoration.
The company is trying to recover from the losses sustained during the pandemic, and making a respectable effort to get back on track. That's a measure that makes this worth a second look as an investment choice, and when you throw in the growing consensus of “buy” recommendations and improved relative strength, Foot Locker may be looking to make one big comeback from the depths of coronavirus-related lockdowns and losses.
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