February 8, 2024
Top 10 Stock Foot Locker Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Foot Locker – Top 10 Stock in S&P Mid-Cap Index
Foot Locker is listed as a top 10 stock on February 08, 2024 in the market index S&P MIDCAP because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 65 (high 65% performer), Obermatt assesses an overall buy recommendation for Foot Locker on February 08, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Apparel Retail |
| Index | Dividends USA, Employee Focus US, S&P MIDCAP |
| Size class | X-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Foot Locker Buy
| 360 METRICS | February 8, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 84 |
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| SENTIMENT | ||||||||
| SENTIMENT | 24 |
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| 360° VIEW | ||||||||
| 360° VIEW | 65 |
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ANALYSIS: With an Obermatt 360° View of 65 (better than 65% compared with alternatives), overall professional sentiment and financial characteristics for the stock Foot Locker are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Foot Locker. The consolidated Value Rank has an attractive rank of 96, which means that the share price of Foot Locker is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 96% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 84. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 24. Professional investors are more confident in 76% other stocks. The consolidated Growth Rank also has a low rank of 21, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 79 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 65, Foot Locker is better positioned than 65% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 96), and the financing structure is on the safer side (Safety Rank of 84). However, sentiment in the professional investor community is below-average (Sentiment Rank of 24), as is the growth momentum for the company (Growth Rank of 21). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Foot Locker negative
ANALYSIS: With an Obermatt Sentiment Rank of 24 (better than 24% compared with alternatives), overall professional sentiment and engagement for the stock Foot Locker is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and above average for Foot Locker. Analyst Opinions are at a rank of 9 (worse than 91% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 53 which means that stock research experts are changing their opinions for the better. In other words, they are getting more optimistic of stock investments in Foot Locker. Market Pulse is also positive with a rank of 57, which means that the current professional news and professional social networks are positive in their discussions about this company (more positive news than for 57% of competitors). Only professional investors tend to be absent with a Professional Investors rank of 20, which means that professional investors hold less stock in this company than in 80% of alternative investment opportunities. Pros tend to invest in other companies. But that could also be due to the size of the company. Professional investors tend to invest in XL and XXL companies. If the company is smaller than that, that fact alone may explain why there are fewer pros present. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 24 (less encouraging than 76% compared with investment alternatives), Foot Locker has a reputation among professional investors that is far below that of its competitors. Since analysts are getting more optimistic and the professional communication channels are positive, it may be an indication of a company that has the difficult times behind it or the stocks’ value is improving. For medium to smaller companies, the positive sentiment indicators outshine the negative. ...read more
Value Strategy: Foot Locker Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 96 (better than 96% compared with alternatives) for 2024, Foot Locker shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, where three out of four indicators are above average for Foot Locker. Price-to-Sales (P/S) is 67 which means that the stock price compared with what market professionals expect for future sales is lower than for 67% of comparable companies, indicating a good value for Foot Locker's revenue size. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 77. Finally, compared with other companies in the same industry, dividend yields of Foot Locker are expected to be higher than for 98% of all competitors (a Dividend Yield rank of 98). The only low rank is for expected profits with a Price-to-Profit Rank of 48, indicating that the market expects the company's profit to be low despite a high dividend. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 96, is a buy recommendation based on Foot Locker's stock price compared with the company's operational size and dividend yields. The low Profit Rank could result from a one-off charge, for instance, for an accident, a legal settlement, or a restructuring project. If the company keeps its dividends high, the low expected profit may be transitory. If that is the case, the three good value ranks for Sales, Capital, and Dividends are reliable indicators for good stock price value, a low stock price. ...read more
Growth Strategy: Foot Locker Growth Momentum negative
ANALYSIS: With an Obermatt Growth Rank of 21 (better than 21% compared with alternatives), Foot Locker shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four indicators below average for Foot Locker. Only Capital Growth has a good rank of 67, which means that currently professionals expect the company to grow its invested capital more than 18% of its competitors. The other three indicators are pointing South: Sales Growth has a rank of 21 which means that currently professionals expect the company to grow less than 79% of its competitors. Profit Growth with a rank of 18 and Stock Returns with a rank of 25 are also low (below 75% of alternative investments). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 21, is a sell recommendation for growth and momentum investors. The good news from the invested capital side is surprising. A company with disappointing revenues, profits, and disappointed shareholders typically doesn't invest above average. Overall, the growth momentum for Foot Locker is thus negative. As it is intriguing to see that company executives are optimistic about their investment policy, it is worthwhile looking into the details of the capital investment projects. They may indicate future growth and profits and thus if accompanied by a good value, a sign of good timing to invest in the stock. ...read more
Safety Strategy: Foot Locker Debt Financing Safety very solid
| SAFETY METRICS | February 8, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 71 |
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| REFINANCING | ||||||||
| REFINANCING | 80 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 75 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 84 |
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ANALYSIS: With an Obermatt Safety Rank of 84 (better than 84% compared with alternatives) for 2024, the company Foot Locker has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Foot Locker is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Foot Locker. Leverage is at 71, meaning the company has a below-average debt-to-equity ratio. It has less debt than 71% of its competitors. Refinancing is at a rank of 80, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 80% of its competitors. Finally, Liquidity is also good at a rank of 75, which means that the company generates more profit to service its debt than 75% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 84 (better than 84% compared with alternatives), Foot Locker has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: Foot Locker Top Financial Performance
| COMBINED PERFORMANCE | February 8, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 21 |
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| SAFETY | ||||||||
| SAFETY | 75 |
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| COMBINED | ||||||||
| COMBINED | 86 |
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ANALYSIS: With an Obermatt Combined Rank of 86 (better than 86% compared with investment alternatives), Foot Locker (Apparel Retail, USA) shares have much better financial characteristics than comparable stocks. Shares of Foot Locker are a good value (attractively priced) with a consolidated Value Rank of 96 (better than 96% of alternatives), are safely financed (Safety Rank of 84, which means low debt burdens), but show below-average growth (Growth Rank of 21). ...read more
RECOMMENDATION: A Combined Rank of 86, is a strong buy recommendation based on Foot Locker's financial characteristics. As the company Foot Locker's key financial metrics exhibit good value (Obermatt Value Rank of 96) but low growth (Obermatt Growth Rank of 21) while being safely financed (Obermatt Safety Rank of 84), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 96% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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