Stifel Keeps L Brands (LB) at Hold; Good News Already Baked into Price

Stifel affirms its Hold rating on L Brands (NYSE: LB) following Q1 results issued Wednesday night.

Analyst Richard Jaffe noted the L Brands' EPS of $.53 topped his estimate by 1 cent, while comps fell in-line with expectations and total sales beat views.

On guidance, Jaffe said, Management has established 2Q EPS guidance of $0.57 - $0.62 and updated its 2014 EPS guidance to $3.00 - $3.15 from $3.00 - $3.20. The updated guidance reflects an estimated negative impact of about $0.10 - $0.12 per share related to the exit of certain non-core categories in the VS Direct and beauty businesses to allow the brand to focus on faster growing, more profitable product lines. Our current estimates are $0.61 and $3.23. Consensus estimates are $0.61 and $3.24. Our estimates are under review.

Bottom line: Despite our favorable near-term and long-term outlook, we believe that with the stock currently trading at 15.7x our 2015 EPS estimate, above the 2-year average of 15.2x, much of the good news is reflected in the current stock price.

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

Shares of L Brands closed at $55.86 yesterday.

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