L Brands Inc LB:NYSE

Last Price$30.33NYSE Previous Close - Last Trade as of 7:00PM ET 9/25/20

Today's Change+0.71(2.40%)
Bid (Size)$30.30 (2)
Ask (Size)$30.61 (1)
Day Low / High$29.40 - 30.51
Volume7.9 M

Research Alert: CFRA Maintains Sell Opinion On Shares Of L Brands, Inc.

10:55AM ET 7/30/2020 MT Newswires
CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:

On July 28, LB said that it expects to deliver about $400M in annualized cost savings, which includes headcount reduction and closure of 250 VS stores in 2020 (previously announced). (While some may applaud the plan as a means to drive operating leverage, we see it as a sign of financial distress.) LB also disclosed that Jul-Q sales are expected to be -20%, above consensus of -26%, reflective, we believe, of pent-up demand and interest for hand sanitizers. That said, LB's 35% share surge yesterday is decoupled from fundamentals. We think investors are underestimating: 1) the pace of consolidation of malls, which threatens the viability of BBW (N.A. segment 55% mall) stand-alone potential; and 2) the burden of debt (LB is among the most leveraged), which gives LB little wiggle room to evolve its business model to a new normal. We reiterate a 12-month target price of $8, 0.2x our FY 21 (Jan.) sales estimate, below the 5-year historical mean. We trim FY 21's EPS to a $0.34 loss from $1.20 EPS on Covid-19.