At $1,692, Booking Holdings is undervalued and a BUY. The company is expected to continue being a significant participant in the growth of online gross bookings. Building on an extensive network and a unique business model, BKNG is likely to grow revenue between 9-11% over the next 10 years, maintaining a 35% EBIT margin. Given its uncertainty profile, a 25% margin-of-safety is recommended.
At $27.71, L Brands, Inc. (LB) is fairly priced and a NO-BUY. Victoria’s Secret, LB’s flagship retail brand, is past its prime. LB’s body-care retail segment, Bath & Body Works, will maintain its high profitability and will grow at the same rate as the industry.