L Brands (NYSE:LB) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a note issued to investors on Wednesday.
According to Zacks, “Despite reporting better-than-expected earnings and revenues in the final quarter of fiscal 2017, L Brands was hit primarily due to soft first quarter and fiscal 2018 view. Consequently, the stock has underperformed the industry in the past three months. Of late, the Zacks Consensus Estimate also witnessed downward revisions. Moreover, shrinking gross margin remains a major concern. Management anticipates gross margin to deteriorate year over year in the first quarter. However, the big take away from this quarter was sharp increase in revenues. Moreover, L Brands’ efforts to streamline Victoria’s Secret business, localizing assortments and enhancing direct business bode well. The company is also confident about achieving growth in the long run and anticipates annual operating income to improve by 10%. Further, the company’s foray into international markets is likely to provide long-term growth opportunities.”
Other equities research analysts also recently issued reports about the company. Scotiabank reiterated a “hold” rating and issued a $67.00 target price on shares of L Brands in a report on Wednesday, November 22nd. Credit Suisse Group started coverage on L Brands in a report on Monday. They issued a “neutral” rating and a $45.00 target price for the company. B. Riley set a $58.00 target price on L Brands and gave the stock a “buy” rating in a report on Thursday, November 16th. Citigroup reiterated a “hold” rating and issued a $58.00 target price on shares of L Brands in a report on Friday, January 5th. Finally, Barclays lifted their target price on L Brands from $44.00 to $49.00 and gave the stock an “equal weight” rating in a report on Thursday, January 25th. Seven analysts have rated the stock with a sell rating, eighteen have given a hold rating and eleven have given a buy rating to the stock. L Brands has an average rating of “Hold” and a consensus target price of $50.33.
L Brands (NYSE:LB) last posted its quarterly earnings data on Wednesday, February 28th. The specialty retailer reported $2.11 EPS for the quarter, topping the Zacks’ consensus estimate of $2.05 by $0.06. The company had revenue of $4.82 billion for the quarter, compared to analyst estimates of $4.72 billion. L Brands had a negative return on equity of 96.25% and a net margin of 7.78%. The firm’s quarterly revenue was up 7.4% on a year-over-year basis. During the same period in the previous year, the firm earned $2.03 earnings per share. analysts predict that L Brands will post 3.17 EPS for the current year.
L Brands announced that its Board of Directors has initiated a stock buyback program on Thursday, March 8th that authorizes the company to buyback $226.90 million in shares. This buyback authorization authorizes the specialty retailer to reacquire shares of its stock through open market purchases. Stock buyback programs are usually a sign that the company’s management believes its stock is undervalued.
A number of hedge funds have recently bought and sold shares of LB. American International Group Inc. boosted its position in L Brands by 74.8% in the fourth quarter. American International Group Inc. now owns 10,436,938 shares of the specialty retailer’s stock worth $628,512,000 after purchasing an additional 4,466,237 shares during the last quarter. Amundi Pioneer Asset Management Inc. purchased a new position in L Brands in the fourth quarter worth $120,549,000. Victory Capital Management Inc. boosted its position in L Brands by 1,045.9% in the fourth quarter. Victory Capital Management Inc. now owns 1,091,745 shares of the specialty retailer’s stock worth $65,745,000 after purchasing an additional 996,468 shares during the last quarter. Barrow Hanley Mewhinney & Strauss LLC boosted its position in L Brands by 29.0% in the third quarter. Barrow Hanley Mewhinney & Strauss LLC now owns 4,156,510 shares of the specialty retailer’s stock worth $172,952,000 after purchasing an additional 935,259 shares during the last quarter. Finally, Flossbach Von Storch AG boosted its position in L Brands by 81.2% in the third quarter. Flossbach Von Storch AG now owns 2,054,020 shares of the specialty retailer’s stock worth $85,468,000 after purchasing an additional 920,710 shares during the last quarter. 81.05% of the stock is currently owned by institutional investors and hedge funds.
About L Brands
L Brands, Inc operates specialty retail business. The Company is focused on women’s intimate and other apparel, personal care, beauty and home fragrance categories. Its segments include Victoria’s Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International. It sells its merchandise through company-owned specialty retail stores in the United States, Canada, the United Kingdom and Greater China, which are mall-based; through Websites, and through international franchise, license and wholesale partners.
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