Undoubtedly, L Brands, Inc. (NYSE:LB) has been one of the most volatile stocks in the market in recent times, and the way it handled Friday’s volatility suggests the stock may be poised to decline heading into short-terms. The shares dropped -0.51 points or -1.89 percent at $26.41 with a light trade volume of 2.991 million shares. After opening the session at $26.7, the shares went as high as $26.79 and as low as $26.1816, the range within which the stock’s price traded throughout the day. The firm is left with a market cap of $7.41 billion and now has 280.44 million shares outstanding. L Brands, Inc. (LB) stock has lost -6.45 percent of market value in 21 trading days.
LB stock has a trailing 3-year beta of 0.56, offering the possibility of a lower rate of return, but also posing less risk. The portion of a company’s profit allocated to each outstanding share of common stock was $2.39 a share in the trailing twelve months. The stock’s value has surged 2.88 percent year to date (YTD) against a decline of -46.22 percent in 12 month’s time. The company’s shares still trade -48.35 percent away from its 1-year high of $51.13 and 11.39 percent up from 52-week low of $23.71. The average consensus rating on the company is 2.7, on a scale where 5 equates to a unanimous sell rating. In short, the mean analyst recommendations are calling this stock a sell.
L Brands, Inc. (LB) will probably climb 28.13 percent over the next 12 months, according to price target estimates compiled by finviz. Meanwhile, they have set a $45 price as 12-month high target. This represents a whopping 70.39 percent increase from where shares are trading today. The 12-month median price target assigned by the analysts stands at $34.5, which represents a return potential of 30.63 percent when compared to the closing price of the stock of $26.41 on Friday, February 08. The lowest price target for the stock is $21 — slightly more than -20.48 percent from LB’s current share price.
History has shown that shares in L Brands, Inc. have gone up on 14 different earnings reaction days and are predicted to add 0.04 percent when the company reports upcoming earnings. Investors will get their next glimpse of LB’s Q4 earnings on February 27. Analysts are forecasting revenue to climb 1.6 percent to $4.9B in the fiscal fourth quarter, while earnings are seen soaring by nearly -1.9 percent to $2.07 per share. It earned $0.16 per share, better than the $0.15, adjusted, expected by Thomson Reuters consensus estimate. Revenue was $2.77B, better than the $2.71B analysts expected. Earnings are estimated to increase by -21.9 percent this year, -1.02 percent next year and continue to increase by 1.07 percent annually for the next 5 years.
Let’s take a look at some insider activity at L Brands, Inc. (NYSE:LB) and see the pattern. The earliest insider trade took place on 11/21/2018. Zimmerman Raymond parted with a total of 6.39 thousand shares of company at average share price of $28.33. The total for the sales was set at $180.89 thousand. After this transaction, the Director account balance stood at 41.07 thousand shares. The stock lost -6.78 percent since that insider sale. On 07/06/2018, Bersani James L., EVP & President – Real Estate, purchased 5 thousand shares at a price per share of $36.28. This added 181.4 thousand shares to the insider’s fortune and the stock saw a -27.21 percent retreat in value since the news became public. This transaction left 219.29 thousand shares in the EVP & President – Real Estate account.
On 05/25/2018, Director James Donna performed a purchase transaction worth $35.29 thousand. This purchase at $35.29 each has added 1 thousand shares into the insider’s portfolio position. Meanwhile, shares have recorded -25.16 percent decrease since the transaction was reported. The insider now is left with 21.74 thousand shares remaining in the account. James Donna, who performs the Director job, sold 1 thousand shares for $35.29 thousand. The disposal occurred on 05/25/2018 was priced at $35.29 per share. The share price plunged -25.16 percent since the reporting date. James Donna now left with a stake of 19.74 thousand LB stock worth $521.28 thousand after the insider selling.
The stock is currently hovering around the first support level of $26.13. Below this, the next support is placed in the zone of $25.85. Till the time, the LB stock trades above this level, bulls have nothing to fear. On momentum oscillators front, ‘RSI’ has touched 36.54 on daily chart, which may remain a cause for comfort. If the price breaks below $25.85 level on closing basis, then we may see more profit booking and the stock may show further weakness. On the flipside, hitting the $26.74 mark may result into a pull-back move towards $27.07 level.
Shares of L Brands, Inc. (LB) are trading at a P/E ratio of 11.07 times earnings reported for the past 12 months. The industry LB operates in has an average P/E of 28.75. Its P/E ratio went as low as 14.83X and as high as 23.09 over the 5-year span.Further, it is sporting a 0.56 on the Price-to-Sales ratio. Compare this with the industry average P/S of 1.66. 37.6 percent is the gross profit margin for L Brands, Inc. and operating margin sits at 10.8 percent. Along with this, the net profit margin is 5.8 percent.