Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
-- L Brands
) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins and good cash flow from operations. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.
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Highlights from the ratings report include:
- LTD's revenue growth trails the industry average of 26.1%. Since the same quarter one year prior, revenues slightly increased by 9.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 47.90% is the gross profit margin for L BRANDS INC which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 10.67% is above that of the industry average.
- Net operating cash flow has slightly increased to $1,276.00 million or 8.87% when compared to the same quarter last year. Despite an increase in cash flow, L BRANDS INC's cash flow growth rate is still lower than the industry average growth rate of 43.27%.
- The company, on the basis of net income growth from the same quarter one year ago, has significantly underperformed compared to the Specialty Retail industry average, but is greater than that of the S&P 500. The net income increased by 14.4% when compared to the same quarter one year prior, going from $359.44 million to $411.40 million.
- In its most recent trading session, LTD has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. The fact that the stock is now selling for less than others in its industry in relation to its current earnings is not reason enough to justify a buy rating at this time.
L Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, beauty and personal care products, and accessories. L has a market cap of $14.4 billion and is part of the services sector and retail industry. The company has a P/E ratio of 19.00, above the S&P 500 P/E ratio of 18.00. Shares are up 5.9% year to date as of the close of trading on Wednesday.
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--Written by a member of TheStreet Ratings Staff.
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