UPDATE: Nomura Initiates Coverage on L Brands with Neutral Rating, $58 PT Ahead of Expected Annual Revenue Expansion

In a report published Monday, Nomura analyst Simeon Siegel initiated coverage on

with a Neutral rating and $58.00 price target. In the report, Nomura noted, “We expect L Brands, Inc. (LTD) will see MSD annual revenue expansion over the next several years driven by LSD comps (growth of new and existing product categories) and LSD square foot expansion predominantly driven by PINK and international locations (~35 net new stores planned in FY13) coupled with upsizing productive domestic locations. Although we do not expect to see LTD issue additional debt in the near term, we project ongoing FCF generation of ~$900mn, which we believe will continue to facilitate the shareholder-friendly cash practices. We are projecting FY13/FY14 EPS estimates of $3.25/$3.62 compared to the Street at $3.22/$3.60. Our target price of $58 is based on 16x our FY14 EPS estimate, versus the peer group average 14x multiple and the company's historical average of 14x.” L Brands closed on Friday at $56.45.