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.

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