L Brands Reaffirmed at Neutral - Analyst Blog
27 December 2013 - 3:00AM
Zacks
We have maintained our Neutral
recommendation on L Brands, Inc. (LB), the
specialty retailer of women’s intimate and other apparel, with a
target price of $64.00. The stock currently carries a Zacks Rank #3
(Hold).
Why
Reiterate?
We believe that Limited Brands’
sustained focus on cost containment, inventory management,
merchandise, and speed-to-market initiatives have kept it afloat in
a sluggish consumer environment. The company’s foray into
international markets is likely to provide long-term growth
opportunities.
Limited Brands commands a market
leading position in the lingerie, personal care and beauty
segments. We believe that the company’s innovation in merchandise
and exclusive assortments remain popular among consumers and sets
it apart from peers.
The company’s strength was well
evident from its third-quarter fiscal 2013 results, wherein
earnings of 31 cents a share came ahead of the Zacks Consensus
Estimate of 28 cents and rose 19% from the prior-year period. The
consumers, who cut back on their discretionary spending during the
recession, are now gradually opening their wallets. Retailers are
spending more on promotions and coming up with lucrative discounts
to drive traffic.
Limited Brands now forecasts
earnings in the range of $1.67 to $1.82 for the fourth quarter and
between $3.07 and $3.22 per share for fiscal 2013.
However, in the near-term, margins
are likely to remain muted on account of probable pressure on
merchandise margins. Going forward, management expects gross
margins to shrivel year over year both for the fourth quarter and
fiscal 2013. Moreover, stiff competition and erratic consumer
behavior still remain major causes of concern.
Given the pros and cons, risk and
reward fairly balance each other.
Other Stocks to
Consider
Other stocks worth considering in
the retail sector includes Deckers Outdoor Corp.
(DECK), The Men's Wearhouse, Inc. (MW) and
Finish Line Inc. (FINL), all carrying a Zacks Rank
#2 (Buy).
DECKERS OUTDOOR (DECK): Free Stock Analysis Report
FINISH LINE-CLA (FINL): Free Stock Analysis Report
L BRANDS INC (LB): Free Stock Analysis Report
MENS WEARHOUSE (MW): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
LandBridge (NYSE:LB)
Historical Stock Chart
From Jun 2024 to Jul 2024
LandBridge (NYSE:LB)
Historical Stock Chart
From Jul 2023 to Jul 2024