FBR Capital Starts Limited Brands (LTD) at Market Perform Due to Tough Comparisons

December 4, 2012 4:54 PM EST
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Price: $65.09 -0.57%

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FBR Capital initiates coverage on Limited Brands (NYSE: LTD) with a Market Perform. PT $50.00.

The firm said after more than two years of high-single-digit comps and operating margin expansion, top-line momentum has been decelerating at Victoria's Secret (VS), as traffic has been inconsistent, while sales productivity and margins appear to be already full. "We expect EPS growth to slow in 2012/2013 (to 12%-14% versus 40%, on average, for the past three years) as benefits from inventory/supply chain initiatives are mostly behind the company and promotional activity at VS has increased for the past few quarters," the analyst said.

The firm also notes the company remains committed to returning excess cash to shareholders and thinks a special dividend could be coming this year.

For an analyst ratings summary and ratings history on Limited Brands click here. For more ratings news on Limited Brands click here.

Shares of Limited Brands closed at $51.55 yesterday.

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