Guggenheim analyst Robert Drbul assigned a Hold rating to L Brands (NYSE: LB) yesterday. The company’s shares closed yesterday at $34.05, close to its 52-week low of $30.70.
Drbul observed:
“We remain NEUTRAL and lower our FY18/FY19 EPS estimates. LB reported 1Q18 EPS of $0.17, $0.02 above our estimate due to a lower-than-forecast tax rate. In 1Q, sales of $2.63bn were up 7.8% YoY (as reported on 5/10 with the April sales release). Total company comp sales rose 3% in 1Q (stores -2%). The 1Q result included a 110bps gross margin decline (worse than our estimate for -80bps of contraction) and by less-than-forecast SG&A expense deleverage (160bps vs. our 190bps estimate). Op. income was $154.8mn vs. our $154.5mn estimate. VS sales increased 4% to $1.59bn (reported 5/10), while operating margin contracted 520bps to 5.2%. Total comps improved to +1% in 1Q (-1% in 4Q), but margins faced pressure from promo activity to drive traffic and investments in resetting bra franchises.”
According to TipRanks.com, Drbul is a 5-star analyst with an average return of 14.9% and a 76.5% success rate. Drbul covers the Services sector, focusing on stocks such as National Vision Holdings Inc, Lululemon Athletica Inc, and Ascena Retail Group.
Currently, the analyst consensus on L Brands is Hold and the average price target is $41.31, representing a 21.3% upside.
In a report issued on May 11, MKM Partners also maintained a Hold rating on the stock with a $33 price target.
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The company has a one-year high of $63.10 and a one-year low of $30.70. Currently, L Brands has an average volume of 4.81M.
Based on the recent corporate insider activity of 26 insiders, corporate insider sentiment is negative on the stock.
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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.
