TSC Ratings' Updates: Limited Brands

LTD had been rated a hold since Aug. 22, 2007.

Dell(DELL Quote) has been downgraded from buy to hold. Dell and its subsidiaries engage in the design, development, manufacture, marketing, sale, and support of computer systems and services worldwide. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we also find weaknesses including unimpressive growth in net income, poor profit margins and weak operating cash flow.

DELL's revenue growth has slightly outpaced the industry average of 10.6%. Since the same quarter one year prior, revenue rose by 11.2%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.

The company's current return on equity greatly increased when compared with its return on equity from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared with other companies in the computers & peripherals industry and the overall market, DELL's return on equity significantly exceeds that of both the industry average and the S&P 500.

DELL's earnings per share declined by 6.1% in the most-recent quarter compared with the same quarter a year ago. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, DELL increased its bottom line by earning $1.32 vs. $1.13 in the prior year. This year, the market expects an improvement in earnings ($1.48 vs. $1.32).