B.Riley FBR Thinks L Brands’ Stock is Going to Recover

B.Riley FBR analyst Susan Anderson reiterated a Buy rating on L Brands (LBResearch Report) today and set a price target of $44. The company’s shares opened today at $27.12, close to its 52-week low of $23.71.

Anderson noted:

“L Brands (LB) reported flat December SSS, below the B. Riley FBR/consensus estimates of +2.9%/ +2.1% and +1.0% LY with BBW again outperforming. December’s merch margin declined Y/Y , driven primarily by significant de-leverage at VS due to increased promotional activity. This was partially offset by merch margin improvement at BBW. Inventories per square foot decreased – 5% Y/Y . On a comparable calendar basis, however, inventory increased +1%. BBW significantly outperformed expectations once again, posting a +11% comp, following +18% SSS growth in November. We note that the strong result came despite a pullback of promotional activity compared to the comparable calendar days LY . Following the December report, management now expects 4Q EPS to come in at the high end of previous guidance for earnings of $1.90–$2.10.”

According to TipRanks.com, Anderson is a 1-star analyst with an average return of -0.4% and a 43.0% success rate. Anderson covers the Services sector, focusing on stocks such as Children’s Place, Urban Outfitters, and Foot Locker Inc.

The word on The Street in general, suggests a Hold analyst consensus rating for L Brands with a $33.69 average price target, implying a 24.2% upside from current levels. In a report issued on December 31, Robert W. Baird also reiterated a Buy rating on the stock with a $34 price target.

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L Brands’ market cap is currently $7.42B and has a P/E ratio of 10.02. The company has a Price to Book ratio of -5.65.

Based on the recent corporate insider activity of 23 insiders, corporate insider sentiment is neutral on the stock.

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L Brands, Inc. engages in the retail business. It is focused on women’s intimate and other apparel, personal care and beauty categories. It operates its business through the following segments: Victorias Secret, Bath & Body Works, and Victoria’s Secret and Bath & Body Works International.

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