Benzinga | Jul 22, 2021 01:03PM EDT

Why Foot Locker Is A Buy, According To Goldman Sachs

Foot Locker, Inc. (NYSE:FL) has released many more new sneakers than its competitors, which further differentiates the company from other retailers and allowing for ongoing pricing power and top-line growth, according to Goldman Sachs.

The Foot Locker Analyst: Kate McShane initiated coverage of Foot Locker with a Buy rating and a price target of $70.

The Foot Locker Thesis: The company has a strong omnichannel presence, generating "more app downloads than comparable sneaker-selling omnichannel retailers," McShane said in the initiation note.

The analyst cited Foot Locker's "ongoing real estate rationalization driving higher sales per square foot," likely ongoing share consolidation and unique differentiators as other reasons for the Buy recommendation.

"We would argue that FL's stock trading at a similar discount to the market versus where it was 3 years ago, which does not take into account Nike's ongoing commitment to cutting the tail of retailers, UAA now becoming more discerning with its accounts, the company's successful digital penetration, and FL's ongoing commitment to closing unproductive doors is a positive signal of FL's potential for upside," she added.

FL Price Action: Shares of Foot Locker traded lower by 1% to $58.06 at publication time.

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