Mizuho Securities Reiterates Buy on L Brands (LB) Following September Comp Report
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Mizuho Securities reiterated a Buy rating and $85.00 price target on L Brands (NYSE: LB) following the company's September comp report. LB reported Sept comps of +3% vs. +9% LY, above consensus’ 0%. Inventory was clean exiting the month, up +2% psf, and in-line with guidance for +L-MSD at 3Q-end.
Analyst Betty Chen commented, "We reiterate our Buy rating on shares of LB as the September comp beat with sequential acceleration at both brands should provide investors with further comfort around 3Q and FY16 guidance. Importantly, while merchandise margins remain under pressure in the near-term, we note LB’s strategy to skew the assortment toward higher-margin growth categories appears to be making progress, evident by the +2% comp in go-forward categories. With management’s track record of strong opex control, we believe ~17x FY17 P/E remains a highly attractive entry point."
Shares of L Brands closed at $70.52 yesterday.
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