Foot Locker may be undervalued with strong growth indicators, but the 19 analysts following the company give it an rating of hold. Their target prices range from $33.0 to $62.0 per share, for an average of $45.47. At today's price of $39.82, Foot Locker is trading -12.43% away from its average target price, suggesting there is an analyst consensus of some upside potential for the stock.
Foot Locker, Inc., through its subsidiaries, operates as a footwear and apparel retailer in North America, Europe, Australia, New Zealand, Asia, and the Middle East. The mid-cap Consumer Discretionary company is based in New York, NY. Foot Locker has provided a 4.0% dividend yield over the last 12 months.
Foot Locker has a trailing twelve month P/E ratio of 11.0, compared to an average of 22.33 for the Consumer Discretionary sector. Based on its EPS guidance of 4.27, the company has a forward P/E ratio of 9.3.
The average annual growth rate of the company's historical and projected earnings per share is 27.0%. On this basis, the company's PEG ratio is 0.41. However, this growth rate is probably not sustainable. In its place we will use the broader market's estimated 5-year EPS growth rate of 13.05%, which gives us a PEG ratio of 0.84. Even with this more conservative assumption on EPS growth, the PEG ratio suggests that Foot Locker shares are underpriced.
Furthermore, the market is potentially undervaluing Foot Locker in terms of its book value because its P/B ratio is 1.1. In comparison, the sector average P/B ratio is 3.12.
| 2020-01-31 | 2021-01-31 | 2022-01-31 | 2023-01-31 | |
|---|---|---|---|---|
| Revenue (MM) | $8,005 | $7,548 | $8,958 | $8,759 |
| Revenue Growth | n/a | -5.71% | 18.68% | -2.22% |
| Gross Margins | 31.8% | 28.9% | 34.4% | 32.0% |
| Gross Margins Growth | n/a | -9.12% | 19.03% | -6.98% |
| Operating Margins | 8.9% | 5.5% | 11.5% | 7.9% |
| Operating Margins Growth | n/a | -38.2% | 109.09% | -31.3% |
| Net Margins | 6.13% | 4.28% | 9.97% | 3.9% |
| Net Margins Growth | n/a | -30.18% | 132.94% | -60.88% |
| Earnings Per Share | $4.56 | $3.08 | $8.61 | $3.62 |
| EPS Growth | n/a | -32.46% | 179.55% | -57.96% |
| Diluted Shares (MM) | 109 | 105 | 104 | 93 |
| Free Cash Flow (MM) | $509 | $903 | $457 | n/a |
| FCF Growth | n/a | 77.41% | -49.39% | n/a |
| Capital Expenditures (MM) | -$187 | -$159 | -$209 | n/a |
| Net Debt / EBITDA | -0.29 | -1.24 | 0.14 | 0.54 |
