L Brands (LB) Upgraded by Zacks Investment Research to Hold

Zacks Investment Research upgraded shares of L Brands (NYSE:LB) from a sell rating to a hold rating in a research note released on Tuesday.

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.”

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Other analysts have also issued research reports about the company. B. Riley reiterated a buy rating and issued a $58.00 target price on shares of L Brands in a research note on Wednesday, November 29th. Northcoast Research upgraded L Brands from a neutral rating to a buy rating in a research note on Wednesday, February 7th. Deutsche Bank reduced their target price on L Brands from $67.00 to $65.00 and set a buy rating on the stock in a research note on Monday, February 26th. Robert W. Baird set a $63.00 target price on L Brands and gave the stock a buy rating in a research note on Wednesday, February 28th. Finally, Royal Bank of Canada reiterated a buy rating and issued a $52.00 target price on shares of L Brands in a research note on Thursday, March 1st. Six equities research analysts have rated the stock with a sell rating, nineteen have issued a hold rating and eleven have assigned a buy rating to the stock. The stock has a consensus rating of Hold and an average target price of $50.24.

Shares of L Brands (NYSE:LB) opened at $37.51 on Tuesday. L Brands has a twelve month low of $35.00 and a twelve month high of $63.10. The firm has a market capitalization of $10,827.69, a price-to-earnings ratio of 10.90, a P/E/G ratio of 1.05 and a beta of 0.59. The company has a current ratio of 1.45, a quick ratio of 0.60 and a debt-to-equity ratio of -5.10.

L Brands (NYSE:LB) last released its quarterly earnings results on Wednesday, February 28th. The specialty retailer reported $2.11 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $2.05 by $0.06. L Brands had a negative return on equity of 96.25% and a net margin of 7.78%. The company had revenue of $4.82 billion for the quarter, compared to analyst estimates of $4.72 billion. During the same quarter in the prior year, the firm posted $2.03 EPS. L Brands’s quarterly revenue was up 7.4% compared to the same quarter last year. equities analysts forecast that L Brands will post 3.17 earnings per share for the current fiscal year.

L Brands announced that its Board of Directors has authorized a share repurchase plan on Thursday, March 8th that authorizes the company to buyback $226.90 million in outstanding shares. This buyback authorization authorizes the specialty retailer to buy shares of its stock through open market purchases. Shares buyback plans are usually an indication that the company’s board of directors believes its shares are undervalued.

The business also recently disclosed a quarterly dividend, which was paid on Friday, March 9th. Investors of record on Friday, February 23rd were given a dividend of $0.60 per share. This represents a $2.40 dividend on an annualized basis and a yield of 6.40%. The ex-dividend date was Thursday, February 22nd. L Brands’s payout ratio is currently 69.77%.

In other L Brands news, CFO Stuart B. Burgdoerfer sold 17,000 shares of the stock in a transaction dated Wednesday, March 21st. The stock was sold at an average price of $39.56, for a total value of $672,520.00. Following the completion of the sale, the chief financial officer now directly owns 52,640 shares in the company, valued at $2,082,438.40. The transaction was disclosed in a document filed with the SEC, which is available at this link. Also, CFO Stuart B. Burgdoerfer sold 33,000 shares of the stock in a transaction dated Tuesday, March 13th. The shares were sold at an average price of $42.53, for a total value of $1,403,490.00. Following the completion of the sale, the chief financial officer now owns 69,640 shares of the company’s stock, valued at $2,961,789.20. The disclosure for this sale can be found here. 16.68% of the stock is owned by company insiders.

A number of institutional investors have recently added to or reduced their stakes in LB. Tower Research Capital LLC TRC raised its stake in L Brands by 182.8% in the fourth quarter. Tower Research Capital LLC TRC now owns 2,110 shares of the specialty retailer’s stock valued at $128,000 after buying an additional 1,364 shares during the last quarter. Gradient Investments LLC purchased a new stake in L Brands in the fourth quarter valued at about $153,000. Steward Partners Investment Advisory LLC purchased a new stake in L Brands in the third quarter valued at about $161,000. Sciencast Management LP purchased a new stake in L Brands in the fourth quarter valued at about $202,000. Finally, Belpointe Asset Management LLC purchased a new stake in L Brands in the fourth quarter valued at about $202,000. Institutional investors own 81.06% of the company’s stock.

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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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