FL
Foot Locker, Inc.
$24.01
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 46.6% below fair value
You pay
$24.01
Bear
$35.95
Fair
$44.94
Bull
$53.93
Bear
$35.95
+49.7%
$3.61 × 12x P/E
Fair
$44.94
+87.2%
$3.61 × 15x P/E
Bull
$53.93
+124.6%
$3.61 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
6.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $27.95 from 52 analysts, using a 35% weight on analyst consensus. That produces an estimated intrinsic value of $44.94 per share.
Warnings
The company's reported profits differ from official accounting profits by 2674%. Check what costs are being left out of the adjusted number.
The company pays out 1231% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $27.14 (below our primary estimate by 50%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $27.95 (from 52 analysts). Our estimate is 94% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples