Goldman Sachs Sees 21% Upside in L Brands (LB) and Raises Rating to 'Buy'
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(Updated - August 22, 2016 8:30 AM EDT)
Goldman Sachs upgraded L Brands (NYSE: LB) from Neutral to Buy with a price target of $94.00 (from $73.00), implying upside of 21%. Analyst Lindsay Drucker Mann thinks a bottom has formed and said the company's path for growth looks "very bright."
"2Q results have eased our concerns about how disruptive the new promotional strategy at Victoria's Secret (VS) would be on the business, and we believe a bottom is visible for productivity and margins. We believe VS can show sequential improvement in margins as it laps transient headwinds, while keeping comp declines contained in the near term. Longer term, LB remains a compelling secular growth story, with outstanding brand equity, best in class operating capabilities and high visibility growth drivers supporting mid-to-high-teens total return potential annually with no multiple expansion (EPS + dividends)," said Drucker Mann.
Shares of L Brands closed at $77.76 yesterday.
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