Foot Locker: Susquehanna downgrades stock, cuts target
(CercleFinance.com) - Susquehanna has downgraded its rating on the Foot Locker share from "positive" to "neutral" and has cut its corresponding target price from 46 dollars to 39 dollars, after Friday's release of quarterly results that were deemed disappointing, as was as an outlook that is considered as being over-optimistic.
While it acknowledges that the sports goods retailer's stock seems very cheap, the broker points out that its sales growth at constant stores will have to accelerate to at least 4.3% in the second half of the year for it to reach the lower end of its annual target range.
"The new product offerings for the back half of the year from the major vendors are compelling, but we are concerned that such new offerings won't be enough," the broker says, adding that it "would have been prudent of management to formally reduce FY19 expectations".
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