Stifel affirms its Hold rating on L Brands (NYSE: LB) following the company's Q3 report and updated outlook issued Thursday morning.

Analyst Richard Jaffe noted that L Brands' Q3 EPS of $0.55 was up 25 percent over last year, or 34 percent excluding foreign exchange.

The analyst noted: Management stated that they are pleased with trends thus far in November. For Holiday, management plans to use the company's nimble inventory capabilities to read and react to sales trends, chasing into strong selling merchandise. Additionally, we believe both brands are benefited by the fact that they have a strong emotional bond with their customers, contributing to strong customer loyalty, driving pricing power for both VS and BBW and insulating both brands from a rather difficult retail environment.

While L Brand's Q4 outlook was below consensus expectations, Jaffe thinks it might be a case of underpromise, overdeliver.

Jaffe affirms his Hold rating amid a recent sell-off in LB shares, believing that the stock is still richly overvalued.

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