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B.Riley FBR Thinks L Brands’ Stock is Going to Recover


In a report released yesterday, Susan Anderson from B.Riley FBR reiterated a Buy rating on L Brands (NYSE: LB), with a price target of $44. The company’s shares opened today at $30.55, close to its 52-week low of $25.89.

Anderson wrote:

“L Brands (LB) reported September SSS of +5.0%, well above the B. Riley FBR/consensus estimates of +1.1%/+0.8% and –2.0% LY . September’s merch margin declined Y/Y , driven by significant deleverage at VS due to increased promotional activity, which more than offset better merch margin performance at BBW. Inventories per square foot increased +20% Y/Y , although management noted only a 10% increase on a 2-year basis, which was in line with their expectations. BBW significantly outperformed expectations once again, posting a +13% comp, following +15% SSS growth in August. We note that the strong result came despite a pullback of promotional activity.”

According to TipRanks.com, Anderson is a 4-star analyst with an average return of 4.8% and a 48.5% success rate. Anderson covers the Services sector, focusing on stocks such as Ascena Retail Group, Abercrombie Fitch, and Children’s Place.

L Brands has an analyst consensus of Hold, with a price target consensus of $30.89, representing a 1.1% upside. In a report released today, Robert W. Baird also reiterated a Buy rating on the stock with a $40 price target.

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L Brands’ market cap is currently $8.31B and has a P/E ratio of 9.58. The company has a Price to Book ratio of -7.39.

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L Brands, Inc. engages in the retail business. It is focused on women’s intimate and other apparel, personal care and beauty categories. It operates its business through the following segments: Victorias Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International.