Citi lifts Foot Locker stock price target to $24 from $20

On Friday, Citi analyst Paul Lejuez issued an update on Foot Locker (NYSE:FL) shares, raising the price target to $24.00, up from the previous $24.00, while maintaining a Neutral rating on the stock. The adjustment follows Foot Locker’s preliminary announcement regarding its first quarter performance, which included a projected comparable store sales decrease of 2.6%, contrasting with the consensus estimate of a 0.7% increase. Additionally, the company anticipates an adjusted loss per share of $0.07, which is steeper than the consensus forecast of a $0.02 loss. Despite recent challenges, InvestingPro data shows the stock has surged nearly 99% in the past week, though technical indicators suggest overbought conditions.

Lejuez’s report also revised earnings estimates for fiscal years 2025 and 2026, lowering them from $1.47 and $1.66 to $0.16 and $0.12, respectively. This change reflects expectations of weaker sales and gross margins, factoring in a challenging economic environment and the impact of increased tariffs. According to InvestingPro analysis, the company maintains a healthy current ratio of 1.7, indicating sufficient liquidity to meet short-term obligations despite operational headwinds. Get access to 10+ additional exclusive ProTips and comprehensive financial analysis with an InvestingPro subscription.

The updated price target of $24 takes into account the proposed acquisition of Foot Locker by Dick’s Sporting Goods (NYSE:DKS), which was announced on May 15. This proposed purchase price has influenced the analyst’s valuation of Foot Locker’s business.

Foot Locker’s recent pre-announcement has led to a reassessment of the company’s financial outlook. The retailer’s struggle with lower-than-expected sales and a loss per share in the first quarter indicates a challenging period ahead.

The retailer, known for its athletic footwear and apparel, is navigating through a period marked by economic uncertainties and heightened tariffs, which are affecting its operational performance and future earnings potential. The proposed acquisition by Dick’s Sporting Goods represents a significant development for the company and has been factored into the new price target set by Citi.

In other recent news, Foot Locker has been at the center of significant developments, primarily revolving around its acquisition by Dick’s Sporting Goods. Barclays (LON:BARC) analysts have downgraded Foot Locker from Overweight to Equal Weight, even as they raised the stock’s price target to $24.00, highlighting the anticipated benefits from the merger, including a combined revenue of $21 billion for FY24. JPMorgan also adjusted its rating, upgrading Foot Locker from Underweight to Neutral and setting a price target of $24.00, citing the acquisition as a potential catalyst for improving Foot Locker’s business outlook. Meanwhile, Needham downgraded Foot Locker from Buy to Hold, noting the stock’s proximity to the acquisition price and the expected completion of the deal in the second half of 2025.

Citi maintained a Neutral rating on Dick’s Sporting Goods with a price target of $220.00, pointing out the strategic advantages of the acquisition, such as increased leverage with key brands and potential improvements in Foot Locker’s performance. Telsey Advisory Group also held its Market Perform rating on Foot Locker, with a price target of $20.00, suggesting that the acquisition could benefit shareholders by enhancing supply chain and e-commerce capabilities. The merger is anticipated to bring about synergies in corporate operations, real estate negotiations, and vendor consolidations. As the acquisition progresses, investors and market observers are closely watching how these strategic moves will unfold.

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