FBR Capital Raises Price Target on L Brands (LB) to $75 Following 2Q EPS Beat
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FBR Capital reiterated a Market Perform rating on L Brands (NYSE: LB), and raised the price target to $75.00 (from $68.00), following the company's 2Q earnings report. Adjusted EPS of $0.70 came in well above the consensus estimates of $0.57 and guidance at the high end of $0.50–$0.60.
Analyst Susan Anderson commented, "LB reported a 2Q16 adjusted EPS beat of $0.70, well above FBR/consensus of $0.58/ $0.57 and guidance at the high end of $0.50–$0.60, which was provided August 4 during its July SSS call. LB previously reported 2Q comps of +3%. The EPS beat was reflective of better-than-expected SG&A margin, driven by disciplined expense management and lower incentive comp. Reflective of the $0.10 beat, 2016 EPS guidance was increased to $3.70–$3.85 (versus FBR/consensus of $3.78/$3.73) from $3.60–$3.80 previously. EPS guidance for 3Q16 was initiated below expectations at $0.40–$0.45 (versus FBR/consensus of $0.50/$0.47). LB also increased its 2016 SSS guidance to flat/+LSD (vs. FBR/consensus of +1.3%) from flat. With the recent structural changes, we remain on the sidelines and look for comp stabilization at VS, increased visibility, improvement in beauty, or a more attractive entry point. With that said, we are increasing our price target to $75."
Shares of L Brands closed at $77.87 yesterday.
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