Foot Locker an undervalued stock with earnings growth

Foot Locker's earnings outlook has been improving in the last six months. Analysts have gone from expecting earnings to decline year-over-year to now expecting substantial earnings growth in 2020 and 2021. That means that Foot Locker's low valuation, with a P/E of just 8.3, should start to head back north toward the 10-20 range. Unless the earnings outlook turns negative again, I think FL's share price should hit $55 in the next year or two. Plus, with a 4% dividend, you get a nice yield on your investment.

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If we get a green close today, then Foot Locker should resume its climb. You're paying just 8.5 P/E for a stock with a nearly 4% dividend and strong earnings growth. This is an absolute steal.