Home Sectors Consumer Cyclical Recent Valuation: L Brands (NYSE: LB)

Recent Valuation: L Brands (NYSE: LB)


L Brands is part of the consumer cyclical sector and retail apparel and specialty industry. The company CEO is Leslie H. Wexner. L Brands Inc is a women’s intimate, personal care, and beauty retailer. The company through its retail outlets sells products under various brands such as Victoria’s Secret, Pink, Bath and Body Works, La Senza, and Henri Bendel brands.

Previous Intraday Trading Performance:

The LB stock showed a previous change of -1.90% with an open at 26.70 and a close of 26.41. It reached an intraday high of 26.79 and a low of 26.18.

CNBC:  Victoria’s Secret is still trying to sell sexy. And it isn’t working


The stock has a market cap of $7.3b with 275.1m shares outstanding, of which the float is 272.4m shares. Trading volume reached 2,991,526 shares compared to its average volume of 4,237,036 shares. Based on the current average volume and close price, the trading liquidity is good.

Historical Trading Performance:

Over the last five trading days, L Brands shares returned -2.33% and in the past 30 trading days it returned 1.23%. Over three months, it changed -13.89%. In one year it has changed -45.68% and within that year its 52-week high was 50.53 and its 52-week low was 23.71. LB stock is 11.39% above its 52 Week Low.

Our calculations show a 200 day moving average of 30.75 and a 50 day moving average of 28.61. Currently LB stock is trading -14.13% below its 200 day moving average and may not be a good opportunity to buy as it may continue to trend down.

CNBC:  Victoria’s Secret is still trying to sell sexy. And it isn’t working


The last annual fiscal EPS for the company was reported at 3.42 that ended on 31st of January 2018, which according to the previous close, that is a PE of 7.72. Based on 14 analyst estimates, the consensus EPS for the next quarter is 2.04. The TTM EPS is 3.22, which comes to a TTM PE of 8.20. Historically, the PE high was 28.90 and the PE low was 7.72. If the stock reached its PE low, that would represent a price of 24.87, which is a decrease of -5.83%.

The following are the last four quarter reported earnings per share:
10-31-2018:  0.16
07-31-2018:  0.36
04-30-2018:  0.17
01-31-2018:  2.11

The dividend per share is currently 1.20, which is a dividend yield of 4.54%. Also, the payout ratio is 37.27%, therefore the dividend is safe according to our calculations. LB stock has a high dividend yield, but because the company has sufficient earnings to cover future dividends, it may be a good investment opportunity for an income portfolio.

Base on our calculations, the intrinsic value per share is 24.30, which means it may be overvalued by -8.69%

Indicators to Watch:

Based on the latest filings, there is 1.00% of insider ownership and 111.50% of institutional ownership. Short-interest is 12,105,968, which is 4.40% of shares outstanding. The short-interest ratio or days-to-cover ratio is 2.19. This stock has some short interest, but it may be normal and no cause for concern if long the position.

The current calculated beta is 0.57

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Fundamental Indicators:

Based on last reported financials, the company’s return on assets is 9.82%, profit margin is 1.24%, price-to-sales is 0.88 and price-to-book is 1,403.38.

Company Scores:

All scores are out of six:
 2  :Valuation Score
 1  :Past Performance Score
 3  :Financial Strength Score
 2  :Future Growth Score
 5  :Dividend Score
 2  :Overall Score

John Jones
Worked for several Wall Street firms: Salomon Smith Barney, UBS, and Charles Schwab. Has developed skills and gained extensive experience over the years that is used today to uncover winning penny stocks.Also was an attorney for small businesses in Scottsdale, Arizona. That experience and understanding of law provides a unique perspective and edge in discovering quality companies in various industries.