FL
Foot Locker, Inc.
$24.01
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 49.8% below fair value
You pay
$24.01
Bear
$38.26
Fair
$47.82
Bull
$57.38
Bear
$38.26
+59.3%
$3.19 × 12x P/E
Fair
$47.82
+99.2%
$3.19 × 15x P/E
Bull
$57.38
+139.0%
$3.19 × 18x P/E
Adjust Assumptions
15.0x
3.19$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
7.5x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (52 analysts)
$27.95
Divergence from AlphaVal
71%
Summary
Applying a 15x P/E to adjusted EPS of $3.19, the base-case value is $47.82 per share. DDM cross-check: $27.14.
Warnings
The company's reported profits differ from official accounting profits by 2352%. 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 43%). 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 71% 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