Barclays Says If Foot Locker Never Grows Again, It's Still Worth More Than It's Trading At Now

While the retail footwear industry has experienced some tough times given major brands increased focus in e-commerce and direct to consumer sales, if Foot Locker, Inc. (NYSE: FL) were to never grow again, Barclays believes it's still under valued.

“In a scenario where Foot Locker does not experience any growth in perpetuity, we achieve a $51 valuation, higher than its current price: This scenario assumes flat comp store sales and flat square-footage growth over the next 10 years,” said Barclays analyst Matthew McClintock.

According to McClintock, an unrealistic negative future is already priced in to Foot Lockers sales. Shares of Foot Locker have suffered a 31 percent year-to-date decline.

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A lot of concern regarding Foot Locker surrounded the news that Nike Inc (NYSE: NKE), the company’s biggest brand partner, announced a partnership with Amazon.com, Inc. (NASDAQ: AMZN).

Matt Powell of NPD Group told Benzinga in a previous interview that he doesn't expect Nike’s deal with Amazon to have a big impact.

“There is no question they (Nike) are growing their DTC, but I don’t think the deal with Amazon will have a big impact initially. I think every brand is focused on DTC, particularly on the e-commerce aspect,” said Powell.

Barclays maintains an Overweight rating on Foot Locker with a $80 price target.