Oppenheimer analyst Anna Andreeva assigned a Buy rating to L Brands (NYSE: LB) today and set a price target of $45. The company’s shares opened today at $32.92, close to its 52-week low of $30.70.
Andreeva noted:
“Per management, VS’s Direct (we model $1.7B in ’18E sales, 23% of total) still operates with 20%+ operating margins, which implies stores’ profitability around MSD —down substantially from mid-to-high teens just three years ago and challenging ongoing commitment to sizable real estate footprint (900+ VS stores, 140 standalone PINK’s). 2Q18 earnings are guided down 30% (on top of down 30% last year), given still traffic challenges at VS and wage pressure (LB is further investing in store sales personnel); annual guidance embeds low- to mid-single-digit EBIT recovery in 4Q18 (after down 30% 1Q18-3Q18). At the same time, BBW (34% of sales, 64% of profits) remains strong (all three main categories working, recent push into health & wellness is resonating), plus 8% FCF yield buys some time, in our view.”
According to TipRanks.com, Andreeva is a 4-star analyst with an average return of 5.7% and a 50.6% success rate. Andreeva covers the Services sector, focusing on stocks such as Lululemon Athletica Inc, Children’s Place, and Urban Outfitters.
Currently, the analyst consensus on L Brands is Hold and the average price target is $39.75, representing a 20.7% upside.
In a report issued on May 14, Citigroup also upgraded the stock to Buy with a $38 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 4.85M.
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.
