The USD 31.8 support area has been tested and now might facilitate a technical rebound. The company’s fundamentals could validate this scenario.
From a fundamental viewpoint, Foot Locker is undervalued in terms of enterprise value. Based on the current price, its market capitalization, plus its net debt, represents 0.67 times its revenues.
This valuation is only 11.93 and 10.72 times the two next years earnings.
Technically, the share is in a negative configuration in the short term as the bearish trend of 20-day moving average, currently at USD 33.4, shows. Nevertheless, the stock seems able to breakout this level to reverse the trend in the mid-term and to reintegrate the bullish channel (blue lines).
Therefore, the current breakout of the USD 33.45 give an opportunity to buy the share for investors. The first goal is a return in the USD 35.1 resistance area, that is a potential of 4.8%. In fact, the security has to cross this area in order to re-establish a bullish trend in the mid term in order to reach the year highs. A stop loss order can be placed under USD 32.5.
Foot Locker, Inc. is a retailer of shoes and apparel. The Company operates through three segments: North America, Europe, Middle East, and Africa (EMEA), and Asia Pacific. The Company's portfolio of brands includes Foot Locker, Kids Foot Locker, Champs Sports, WSS, and atmos. It uses its omni-channel capabilities to bridge the digital world and physical stores, including order-in-store, buy online and pickup-in-store, and buy online and ship-from-store, as well as e-commerce. It operates websites and mobile apps aligned with the brand names of its store banners. The Company operates approximately 2,523 stores in 26 countries across North America, Europe, Australia, New Zealand, and Asia, and a franchised store presence in the Middle East and Asia. The Kids Foot Locker offers athletic footwear, apparel, and accessories for children. Champs Sports is a primarily mall-based specialty athletic footwear and apparel retailer. atmos is a digitally led, brand featuring sneakers and apparel.