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Analysts React To L Brands Earnings

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Analysts React To L Brands Earnings

L Brands Inc (NYSE: LB) stock traded higher by 4 percent Thursday after the company reported first-quarter earnings.

Several Wall Street analysts weighed in on the stock following the report. Here’s a sampling of what they had to say.

Voices From The Street

Nomura analyst Simeon Siegel said the company’s guidance cut was an ominous sign.

“1Q raised a number of red flags (severe margin contraction at LB, bloated inventory and a guidedown for the remainder of the year), and had few positives ([Bath & Body Works] margin continuing its stabilization/expansion),” Siegel wrote.

Piper Jaffray analyst Erinn Murphy said investors should approach L Brands stock with caution.

“While BBW is executing well, we remain sidelined given multiple sources of competitive pressure surrounding [Victoria’s Secret],” Murphy wrote.

Buckingham Research Group analyst Kelly Crago said the guidance cut reflects a more realistic outlook from management and may have eliminated some of the risk in the stock.

“Additionally, we were encouraged by the company's emphasis on supply chain and technology investments, a big positive, in our view, as we believe the company is behind on crucial omni-channel investments,” Crago wrote.

Bank of America analyst Lorraine Hutchison said lackluster Victoria’s Secret performance continued to weigh on L Brands.

“With no margin recovery in sight, we view the stock as expensive and see risk to both brands’ profitability,” Hutchison wrote.

Ratings And Targets

  • Nomura has a Neutral rating and $29 target.
  • Piper Jaffray has a Neutral rating and $30 target.
  • Buckingham Research Group has a Neutral rating and $31 target.
  • Bank of America has an Underperform rating and $29 target.

At time of publication, the stock traded around $35.31.

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Image credit: Dwight Burdette, CC BY 3.0, via Wikimedia Commons

Latest Ratings for LB

DateFirmActionFromTo
Mar 2020B. Riley FBRMaintainsBuy
Mar 2020CitigroupMaintainsNeutral
Mar 2020Deutsche BankReiteratesBuy

View More Analyst Ratings for LB
View the Latest Analyst Ratings

 

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