L Brands, Inc. (LB)

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B&BW shows strength. VS angels are falling.

Price 
$27.71
Uncertainty
High
Enterprise
Value
$18,529m
VS Economic
Moat
None
Fair Value
range estimate
$24 to $28
Stewardship
Standard/
Questionable
Market Cap
$7,624m
B&BW
Economic Moat
Narrow

Recommendation

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.

Reasonable expectations for LB up to 2023 include YOY sales growth rate ranging 2-3.5%, with profitability levels similar to today, and lower capital efficiency. The resulting fair value range is $24 to $28, making LB an underwhelming prospect.

For full report, see link below

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