Monday, September 21, 2020

MKM Partners slashes price target on L Brands Inc. [LB] – find out why.

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L Brands Inc. [NYSE: LB] stock went on a downward path that fall over -5.22% on Thursday, amounting to a one-week price decrease of less than -1.04%. The company report on August 19, 2020 that L Brands Reports Second Quarter 2020 Results.

L Brands, Inc. (NYSE: LB) today reported second quarter earnings results.

Consistent with expectations disclosed in the company’s July 28, 2020 business update, net sales were $2.319 billion for the quarter ended Aug. 1, 2020, a decrease of 20 percent compared to sales of $2.902 billion for the quarter ended Aug. 3, 2019. The company’s stores were closed during periods of time throughout the second quarter due to the COVID-19 pandemic. As of the end of the second quarter, most Bath & Body Works and Victoria’s Secret stores in North America have reopened. .

Over the last 12 months, LB stock rose by 76.10%. The one-year L Brands Inc. stock forecast points to a potential upside of 2.57. The average equity rating for LB stock is currently 2.80, trading closer to a bullish pattern in the stock market.

The market cap for the stock reached $8.30 billion, with 277.00 million shares outstanding and 228.24 million shares in the current float. Compared to the average trading volume of 6.93M shares, LB stock reached a trading volume of 3569602 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Guru’s Opinion on L Brands Inc. [LB]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for LB shares is $30.40 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on LB stock is a recommendation set at 2.80. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

MKM Partners have made an estimate for L Brands Inc. shares, keeping their opinion on the stock as Buy, with their previous recommendation back on August 25, 2020. While these analysts kept the previous recommendation, Telsey Advisory Group raised their target price from $23 to $30. The new note on the price target was released on August 21, 2020, representing the official price target for L Brands Inc. stock. Previously, the target price had yet another raise from $15 to $17, while Citigroup kept a Sell rating on LB stock.

The Average True Range (ATR) for L Brands Inc. is set at 1.46, with the Price to Sales ratio for LB stock in the period of the last 12 months amounting to 0.73. Price to Free Cash Flow for LB in the course of the last twelve months was 18.61 with Quick ratio for the last quarter at 0.50.

LB Stock Performance Analysis:

L Brands Inc. [LB] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -1.04. With this latest performance, LB shares gained by 16.07% in over the last four-week period, additionally plugging by 33.12% over the last 6 months – not to mention a rise of 76.10% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for LB stock in for the last two-week period is set at 62.18, with the RSI for the last a single of trading hit 55.00, and the three-weeks RSI is set at 64.04 for L Brands Inc. [LB]. The present Moving Average for the last 50 days of trading for this stock 22.81, while it was recorded at 30.30 for the last single week of trading, and 18.46 for the last 200 days.

Insight into L Brands Inc. Fundamentals:

Operating Margin for any stock indicates how profitable investing would be, and L Brands Inc. [LB] shares currently have an operating margin of +9.49 and a Gross Margin at +36.38. L Brands Inc.’s Net Margin is presently recorded at -2.83.

Return on Total Capital for LB is now 19.57, given the latest momentum, and Return on Invested Capital for the company is -6.15. Additionally, LB Total Debt to Total Capital is recorded at 119.78, with Total Debt to Total Assets ending up at 89.66.

Reflecting on the efficiency of the workforce at the company, L Brands Inc. [LB] managed to generate an average of -$3,877 per employee. Receivables Turnover for the company is 38.38 with a Total Asset Turnover recorded at a value of 1.42.L Brands Inc.’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.50 and a Current Ratio set at 1.10.

LB Stock EPS

With the latest financial reports released by the company, L Brands Inc. posted 0.02/share EPS, while the average EPS was predicted by analysts to be reported at 0.02/share. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for LB. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for L Brands Inc. go to 7.10%.

L Brands Inc. [LB] Insider Position Details

There are presently around $6,385 million, or 81.50% of LB stock, in the hands of institutional investors. The top three institutional holders of LB stocks are: MELVIN CAPITAL MANAGEMENT LP with ownership of 27,701,362, which is approximately 113.087% of the company’s market cap and around 0.30% of the total institutional ownership; LONE PINE CAPITAL LLC, holding 26,265,094 shares of the stock with an approximate value of $777.97 million in LB stocks shares; and VANGUARD GROUP INC, currently with $711.14 million in LB stock with ownership of nearly -9.219% of the company’s market capitalization.

Positions in L Brands Inc. stocks held by institutional investors increased at the end of August and at the time of the August reporting period, where 159 institutional holders increased their position in L Brands Inc. [NYSE:LB] by around 39,136,637 shares. Additionally, 221 investors decreased positions by around 41,368,749 shares, while 48 investors held positions by with 135,066,746 shares. The mentioned changes placed institutional holdings at 215,572,132 shares, according to the latest SEC report filing. LB stock had 62 new institutional investments in for a total of 13,235,614 shares, while 82 institutional investors sold positions of 12,126,678 shares during the same period.

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