Citi upgrades Foot Locker to Neutral on Nike strategy change

Citi upgraded Foot Locker (FL) to Neutral from Sell with a price target of $24, up from $19. On Nike’s (NKE) fiscal Q3 earnings call, management acknowledged they were too focused on growing their own digital channel, which has come at the expense of wholesale, particularly in North America, the analyst tells investors in a research note. The firm says that while there is no guarantee Foot Locker will benefit from Nike’s product pivot, there seems to be a higher likelihood Foot Locker could see better allocation. With the change in Nike’s strategy, the firm views the risk/reward on Foot Locker as more balanced, especially following the stock’s recent 30% decline.