"We believe Foot Locker can withstand the challenge from Amazon," Jay Sole, equity analyst, and Edward Ryan, research associate, said in a Tuesday note.
They have a 12-month $65 price target on Foot Locker, which is 33 percent higher than the stock's Monday closing price and close to where it traded in December. The shares climbed 4 percent Tuesday morning to above $50, still about 30 percent lower year to date.
Less than 5 percent of Foot Locker's 200 best-selling shoes are available on Amazon, the analysts said, while top athletic brands like Nike and Adidas still prefer to sell shoes through the brick-and-mortar retailer at an average price of $130 a pair.
"Amazon has positioned itself as a mid-market/mass retailer. It carries essentially none of the top selling, high-end styles from Nike and Adidas and we don't think that will change," the report said. "We expect FL to surprise the market by returning to 3-5% comp growth over the coming quarters."
The analysts estimate the higher-end athletic shoe market accounts for about 20 to 25 percent of the total footwear market, while Amazon is likely more focused on the larger, lower-end shoe market.
"We think brands will continue to allocate to Foot Locker a high-end product assortment which includes many styles consumers can't find anywhere else," the report said. "This unique high-end product offering is what will sustain Foot Locker over the long term."