Shares of Foot Locker Inc (FL  ) continued to climb after spiking last month on strong quarterly earnings.

The company's turnaround story has stronger prospects than others in the retail sector, according to Piper Sandler.

The Foot Locker Analyst: Abbie Zvejnieks upgraded the rating for Foot Locker from Neutral to Overweight, while raising the price target from $24 to $33.

The Foot Locker Thesis: The company is best positioned among its peers for the next six to 12 months and could expand its operating margins by more than 180 basis points in 2024, Zvejnieks said in the upgrade note.

"We have heard some early commentary that the lower income consumer may be beginning to recover from when spending was significantly pressured by inflation," the analyst wrote.

While industry-wide inventory levels "should be healthier" by year-end, Foot Locker may "bring in newness and pivot the assortment to give consumers trending product from brands such as New Balance, Adidas (ADDYY  ), and Nike (NKE  )," Zvejnieks stated. The newness "should lead to a favorable mix of full price sales" in 2024, she added.

FL Price Action: Shares of Foot Locker were up 8.7% to $31.03 at the time of publication Thursday.