Would you shadow Footlocker analysts?


USD 31.89  0.44  1.36%   

Footlocker is scheduled to announce its earnings today. As some millenniums are still trying to avoid consumer cyclical space, I will try to summarize Footlocker a little further in order to understand its potential as a viable investment. We will evaluate why we are still optimistic in anticipation of a recovery.
Published over a month ago
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Footlocker has a performance score of 3 on a scale of 0 to 100. The firm shows a Beta (market volatility) of 1.5616, which means a somewhat significant risk relative to the market. Let's try to break down what Footlocker's beta means in this case. As the market goes up, the company is expected to outperform it. However, if the market returns are negative, Footlocker will likely underperform. Although it is important to respect Footlocker historical returns, it is better to be realistic regarding the information on the equity's current trending patterns. The philosophy towards predicting future performance of any stock is to evaluate the business as a whole together with its past performance, including all available fundamental and technical indicators. By reviewing Footlocker technical indicators, you can presently evaluate if the expected return of 0.14% will be sustainable into the future. Footlocker right now shows a risk of 2.98%. Please confirm Footlocker jensen alpha, as well as the relationship between the potential upside and skewness to decide if Footlocker will be following its price patterns.
What is the right price you would pay to acquire a share of Footlocker? For most investors, it would be the price that gives them a wide margin of safety to have minimal downside risk. In other words, most investors are always looking for undervalued stocks. Even if the future performance is not entirely as expected, the loss of holding it is minimized, and the downside risk is negated.
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What is happening with Footlocker this year

Annual and quarterly reports issued by Footlocker are formal financial statements that are published yearly and quarterly and sent to Footlocker stockholders. The reports show and break down the current year's ongoing operations and discuss plans for the upcoming year. Annual reports have been a requirement from the Securities and Exchange Commission (SEC) for businesses owned by the public since 1934.
Companies such as Footlocker often view their annual report as an effective marketing tool to disseminate their perspective on company future earnings or innovations. With this in mind, many companies devote large sums of money to making their reports attractive and informative. In such instances, the annual report becomes a forum through which a company can communicate to the general public any number of topics that may or may not be directly related to the actual data published in the reports.

How does Footlocker utilize its cash?

To perform a cash flow analysis of Footlocker, investors first need to understand how to read the cash flow statement. A cash flow statement shows the amount of cash Footlocker is receiving and how much cash it distributes out in a given period. The Footlocker cash flow statement breaks down these inflows and outflows into different buckets, including operating activities, investing activities, and financing activities.

An Additional Perspective On Footlocker

Earning per share calculations of Footlocker is based on official Zacks consensus of 9 analysts regarding Footlocker's future annual earnings. Given the historical accuracy of 71.58%, the future earnings per share of the company is estimated to be 7.54 with the lowest and highest values of 7.26 and 7.61, respectively. Please note that this consensus of annual earnings estimates for the firm is an estimate of EPS before non-recurring items and including employee stock options expenses. The bottom line is that whether you decide to buy Footlocker or not, do not make market timing a crucial part of their investment strategy. If you do, it can result in missing out on opportunities acquiring Footlocker (NYSE:FL) at a lower price while you will try to predict a bottom of a market sell-off.

Footlocker Current Consensus

Here is the new trade recommendation based on an ongoing consensus estimate among financial analysis covering Footlocker. The Footlocker consensus assessment is calculated by taking the average estimates from all of the analysts covering Footlocker

Strong Buy
Strong Sell
Strong Buy650.0
Strong Sell18.33

Some Footlocker technical indicators suggest bounce back

New Skewness is up to -0.06. Price may pull down again. Footlocker currently demonstrates below-average downside deviation. It has Information Ratio of 0.02 and Jensen Alpha of 0.02. However, we advise investors to further question Footlocker expected returns to ensure all indicators are consistent with the current outlook about its relatively low value at risk. Understanding different market volatility trends often help investors to time the market. Properly using volatility indicators enable traders to measure Footlocker's stock risk against market volatility during both bullish and bearish trends. The higher level of volatility that comes with bear markets can directly impact Footlocker's stock price while adding stress to investors as they watch their shares' value plummet. This usually forces investors to rebalance their portfolios by buying different stocks as prices fall.

The Current Takeaway on Footlocker Investment

While many of the other players under the apparel retail industry are still a bit expensive, Footlocker may offer a potential longer-term growth to stakeholders. To conclude, as of the 19th of August 2022, we believe that Footlocker is currently undervalued with below average probability of distress in the next two years. Our ongoing 90 days recommendation on the company is Cautious Hold.

Editorial Staff

This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Vlad Skutelnik do not own shares of Footlocker. Please refer to our Terms of Use for any information regarding our disclosure principles.

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