In a report released today, Robert Drbul from Guggenheim maintained a Hold rating on L Brands (LB). The company’s shares opened today at $23.02, close to its 52-week low of $21.47.
Drbul wrote:
“We forecast -LSD% comps in 2019. BBW remains solid, growing sales 14.5% to $871mn in 1Q, with op. margins up ~150bps. Total comps were up a strong 13%, above our +4% estimate, with store comps up 7% and digital up 40%. Gross margin improved YoY, led by an increase in merch. margins and leverage on occupancy costs. These benefits were partially offset by higher supply chain and sourcing costs (fuel, wage, and tariff pressure). Growth was broad-based across body care, home fragrance, and soaps and sanitizers. In FY19, we forecast +MSD% comps (from +LSD% prior). BBW continues to remodel stores at a healthy clip, aiding sales but placing some pressure on occupancy expense; the company plans to remodel an additional 200 doors in 2019 (~in-line with the pace over the past 3 years), bringing the total count to ~50% of the fleet (~860 doors) in 2019.”
According to TipRanks.com, Drbul is a 5-star analyst with an average return of 10.0% and a 65.4% success rate. Drbul covers the Services sector, focusing on stocks such as National Vision Holdings Inc, Ascena Retail Group, and Ralph Lauren Corp.
Currently, the analyst consensus on L Brands is a Hold with an average price target of $28.79, representing a 25.1% upside. In a report issued on May 16, Cowen & Co. also maintained a Hold rating on the stock with a $22 price target.
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The company has a one-year high of $38.14 and a one-year low of $21.47. Currently, L Brands has an average volume of 4.67M.
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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.
