Zacks Investment Research cut shares of L Brands (NYSE:LB) from a hold rating to a strong sell rating in a research note issued to investors on Wednesday morning.
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.”
A number of other equities analysts have also recently commented on the stock. BMO Capital Markets set a $56.00 target price on shares of L Brands and gave the company a hold rating in a report on Tuesday, December 19th. Morgan Stanley reiterated an overweight rating and issued a $70.00 price objective on shares of L Brands in a research report on Thursday, December 14th. Robert W. Baird set a $60.00 price objective on shares of L Brands and gave the company a hold rating in a research report on Thursday, December 28th. Scotiabank reiterated a hold rating and issued a $59.00 price objective on shares of L Brands in a research report on Wednesday, January 17th. Finally, Piper Jaffray set a $49.00 price objective on shares of L Brands and gave the company a hold rating in a research report on Wednesday, January 10th. Seven analysts have rated the stock with a sell rating, seventeen have issued a hold rating and eleven have given a buy rating to the stock. The company has an average rating of Hold and a consensus target price of $50.24.
L Brands (NYSE:LB) last announced its earnings results on Wednesday, February 28th. The specialty retailer reported $2.11 EPS for the quarter, beating analysts’ consensus estimates of $2.05 by $0.06. The business had revenue of $4.82 billion for the quarter, compared to analysts’ expectations of $4.72 billion. L Brands had a net margin of 7.78% and a negative return on equity of 101.69%. The company’s quarterly revenue was up 7.4% on a year-over-year basis. During the same period in the previous year, the company posted $2.03 EPS. analysts anticipate that L Brands will post 3.17 earnings per share for the current year.
L Brands announced that its Board of Directors has approved a stock repurchase program on Thursday, March 8th that authorizes the company to buyback $226.90 million in outstanding shares. This buyback authorization authorizes the specialty retailer to purchase shares of its stock through open market purchases. Stock buyback programs are generally a sign that the company’s board believes its shares are undervalued.
In other L Brands news, CFO Stuart B. Burgdoerfer sold 17,000 shares of the business’s stock in a transaction on Wednesday, March 21st. The shares were sold at an average price of $39.56, for a total transaction of $672,520.00. Following the sale, the chief financial officer now directly owns 52,640 shares in the company, valued at approximately $2,082,438.40. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through the SEC website. Also, CFO Stuart B. Burgdoerfer sold 33,000 shares of the business’s stock in a transaction on Tuesday, March 13th. The stock was sold at an average price of $42.53, for a total transaction of $1,403,490.00. Following the sale, the chief financial officer now owns 69,640 shares in the company, valued at $2,961,789.20. The disclosure for this sale can be found here. 16.68% of the stock is currently owned by insiders.
Several hedge funds and other institutional investors have recently modified their holdings of the business. American International Group Inc. boosted its position in shares of L Brands by 74.8% in the 4th quarter. American International Group Inc. now owns 10,436,938 shares of the specialty retailer’s stock worth $628,512,000 after buying an additional 4,466,237 shares in the last quarter. California Public Employees Retirement System boosted its position in shares of L Brands by 7.0% in the 3rd quarter. California Public Employees Retirement System now owns 585,641 shares of the specialty retailer’s stock worth $24,369,000 after buying an additional 38,141 shares in the last quarter. Barrow Hanley Mewhinney & Strauss LLC boosted its position in shares of L Brands by 29.0% in the 3rd quarter. Barrow Hanley Mewhinney & Strauss LLC now owns 4,156,510 shares of the specialty retailer’s stock worth $172,952,000 after buying an additional 935,259 shares in the last quarter. Griffin Asset Management Inc. purchased a new stake in shares of L Brands in the 3rd quarter worth about $562,000. Finally, Caisse DE Depot ET Placement DU Quebec boosted its position in shares of L Brands by 10.0% in the 4th quarter. Caisse DE Depot ET Placement DU Quebec now owns 139,122 shares of the specialty retailer’s stock worth $8,378,000 after buying an additional 12,600 shares in the last quarter. Institutional investors own 81.06% of the company’s stock.
L Brands Company Profile
L Brands, Inc operates as a specialty retailer of women's intimate and other apparel, beauty and personal care products, and accessories. The company operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International. Its products include loungewear, bras, panties, swimwear, athletic attire, fragrances, shower gels and lotions, aromatherapy, soaps and sanitizers, home fragrances, handbags, jewelry, and personal care accessories.
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