UBS Cuts Target On L Brands From $74 To $68

L Brands Inc LB reported Q2 EPS of $59 on sales of $2.6 billion. However, its Q2 guidance came in well below estimates. This was enough to lead UBS to lower its price target on shares from $74 to $68.

The firm believes L Brands is working to protect EPS while same-store sales decelerate rapidly. Analysts believe reduced interest expenses, buybacks and less FX drag will at least help offset this recent deceleration.

"Though we remain concerned about fashion trends in categories like bralettes—where LB has much less of a competitive moat vs traditional bras (bralettes share gains were likely a key driver to AEO/Aerie's best-in-mall SSS in 1Q), we are heartened by con't strong performance at PINK (+DD 1Q growth in core lingerie)," the note said.

Shares closed Thursday's session at $60.62, down 4.9 percent.