Shares of Foot Locker, Inc. (NYSE:FL) have been on an uptrend so far this year.
Since Mary Dillon took over as CEO in September, the company’s relationship with Nike Inc (NYSE:NKE) has improved, according to Credit Suisse.
The Foot Locker Analyst: Michael Binetti upgraded the rating for Foot Locker from Neutral to Outperform, while raising the price target from $38 to $62.
The Foot Locker Thesis: Although the stock has gained more than 15% year to date, sentiment remains “overly bearish,” with investors focusing on the negative impact of Nike pulling away, Binetti said.
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“We see consistent evidence that the Nike relationship is improving, and we’re increasingly convinced that the planned pullback from FL will be far less damaging that we initially expected,” the analyst wrote.
“We expect FL to set initial ’23 guidance below current consensus to leave cushion as the new CEO accelerates investment priorities,” Binetti stated. However, there could be “significant upside to ‘24/’25 Street ests,” he adds.
FL Price Action: Shares of Foot Locker rose by 2.99% to $44.81 in pre-market trading on Wednesday.