FBR Capital Cuts Price Target on L Brands (LB) to $69 Following 3Q
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FBR Capital maintained a Market Perform rating on L Brands (NYSE: LB), and cut the price target to $69.00 (from $75.00), following the company's 3Q earnings report. LB reported an adjusted EPS of $0.42, in line with the consensus of $0.40. The EPS beat was driven by lower tax rate of 36% versus 38% estimates. Management initiated 4Q EPS guidance of $1.80 to $2.00, below consensus of $2.03.
Analyst Susan Anderson commented, "LB reported a 3Q16 adjusted EPS of $0.42, in line with FBR/consensus of $0.40 and in line with guidance provided on October 31. LB previously reported 3Q sales up +4% from last year and 3Q comps of +2.1%. The EPS beat was reflective of a slightly lower tax rate, while GM and SG&A came in line with expectations. LB guided 4Q EPS to $1.85 to $2.00 versus FBR/consensus of $2.01/$2.03 and revised 2016 guidance to $3.56 to $3.71 versus $3.70 to $3.85 previously and FBR/consensus of $3.71/ $3.73. We like LB's execution, resilient businesses, focus on inventory management/ speed, and growth potential, but we believe the stock is fairly valued given expected headwinds in 4Q16/1H17 and uncertainty around the timing of a return to LB's longterm growth metrics."
Shares of L Brands closed at $67.93 yesterday.
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