Foot Locker (NYSE:FL) FBR Top List Pick, Hanesbrands (NYSE:HBI)Removed

While FBR continues to like what Hanesbrands (NYSE:HBI) has done to deal with soaring cotton prices, they still believe it may take time for them to implement the changes, and have placed Foot Locker (NYSE:FL) as their as their "Top List Pick" while removing Hanesbrand.

FBR said, "With strong proxy data points out of competitor Finish Line (Nasdaq:FINL) and, more importantly, vendor partner Nike (NYSE:NKE), which posted North American futures orders +16% (sequentially accelerating from +15% in 2Q), we move Foot Locker to the FBR Top Picks list...While we continue to be constructive on Hanesbrands (OP-rated), with cotton prices at historic highs, near-term catalysts are lacking to offset the overhang (more sentiment than fundamentals, in our view) on shares. We continue to believe Hanesbrands is better positioned than most apparel vendors to handle product cost inflation— it has bought/hedged out cotton better and longer, implemented price increases, and maintained more supply chain levers to offset inflationary pressures. As a result, we believe fundamentals should hold up better than most, but this may take time to play out. That said, a material reversal in cotton prices over the near term could be a major catalyst for HBI shares."

FBR Capital maintains an "Outperform" rating on Foot Locker, which closed Wednesday at $19.54, down $0.27, or 1.36 percent. Hanesbrands closed at $24.94, down $0.42, or 1.66 percent. FBR raised their price target on Foot Locker from $21 to $23.