DJ Buy L Brands Stock Because Victoria's Secret Is Likely to Be Shed, Analyst Says -- Barrons.com
By Ben Walsh
L Brands stock had a pretty wretched 2019, but Key Banc Capital Markets analyst Edward Yruma thinks that poor run will help the Victoria's Secret owner. He upgraded the stock to Overweight from Sector Weight, because as he wrote in a note to clients Monday, "the worse [the] comps get, the better [it is for] the stock."
L Brands (ticker: LB) was up 1.8% to $20.53 near midday Tuesday. The stock is down 25% over the past 12 months, compared with the S&P 500's 26% gain over the same period.
Crucially, Yruma thinks that, while the company's Victoria's Secret brand has been struggling, its other main asset, Bath & Body Works, is a "highly attractive asset" on a stand-alone basis.
"We believe that the stark differential in performance between Victoria's Secret and Bath & Body Works, and lack of any discernible turnaround at VS, makes a value creating transaction more likely."
Bath & Body Works "has posted 5% + comps for eight consecutive quarters and the +9% holiday comp points to the strength within the business," he wrote. "We believe that the business is one of the best in the personal care/home fragrance market and importantly has not seen the level of digital disruption...that we have observed in other areas of specialty retail."
The "path to value creation," as Yruma describes it, is for L Brands to spin out its Victoria's Secret business, which he estimates would deliver between $4 and $6 a share in value. That would leave Bath & Body Works as effectively an independent company and allow it to pay down debt and buy back shares.
Yruma thinks that something akin to this strategy is likely and that the stock could hit $25 a share from its current level around $20, if it were pursued.
Write to Ben Walsh at ben.walsh@barrons.com
(END) Dow Jones Newswires
January 21, 2020 12:39 ET (17:39 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
DJ購買L品牌股票，因為維多利亞的祕密可能會被拋棄，分析師説--Barrons.com
本·沃爾什
lBrands的股票在2019年表現得相當糟糕，但Key Banc Capital Markets分析師愛德華·尤瑪(Edward YRuma)認為，糟糕的運營將有助於維多利亞的祕密所有者。他將股票從板塊權重調高至增持，因為正如他在週一寫給客户的一份報告中所寫的，“情況更糟”。[這個]比較，越好[是為了]股票。“
週二中午時分，L品牌股價上漲1.8%，至20.53美元。該股在過去12個月裏下跌了25%，而標準普爾500指數同期上漲了26%。
至關重要的是，尤瑪認為，儘管該公司的維多利亞祕密品牌一直在掙扎，但它的另一項主要資產，Bath&Body Works，是一項獨立的“極具吸引力的資產”。
“我們認為，維多利亞的祕密和沐浴與身體之間的明顯差異，以及VS缺乏任何明顯的轉變，使得創造價值的交易更有可能發生。”
他寫道：“Bath&Body Works已經連續8個季度發佈了5%以上的業績，而+9%的假日薪酬表明了企業內部的實力。”“我們相信，該業務是個人護理/家庭香水市場中最好的業務之一，而且重要的是，我們在其他專業零售領域還沒有看到數字產品的破壞程度。”
正如YRuma所描述的那樣，“價值創造之路”是由L Brands分拆其維多利亞祕密業務，據他估計，該業務的每股價值將在4美元至6美元之間。這將使Bath&Body成為一家有效的獨立公司，並允許其償還債務和回購股票。
YRuma認為，這一策略很可能類似，如果被追捧，該股可能會從目前的20美元左右升至每股25美元。
電子郵件：ben.walsh@barrons.com
(完)道瓊斯通訊社
2020年1月21日12：39(格林尼治時間17：39)
版權(C)2020 DowJones&Company，Inc.
