The Defense Case For L Brands

Brean Capital’s Liz Pierce maintained a Buy rating for L Brands Inc LB, with a price target of $100, after the company reported its February comp results in-line with expectations.

L Brands comp results were impressive, “reinforcing our belief that its guidance is likely conservative,” analyst Liz Pierce said. She believes that the company is among the best-positioned retailers to combat the uncertain environment and challenging headwinds, since it has strong brands.

L Brands’ March comps are expected to be flat to up low-single-digit, with the Easter shift expected to exert pressure on comps by 1-2 percent. Pierce expects comps to be up in the low-single-digit range for the combined March and April period.

“We further believe that LB still has significant domestic and international growth and that as international grows, given its higher margin structure, it will become increasingly accretive to overall margins,” the analyst wrote.

While L Brands’ shares are trading at a premium to the peer group multiples, the premium valuation is warranted, given the consistency of its results and the fact that “the global growth potential of all of its brands qualifies LB as a Best-of-Breed retailer,” Pierce added.