NEW YORK (TheStreet) -- L Brands (LB) - Get Report  shares are down 1.74% to $93.99 on Thursday after analysts at Barclays initiated coverage of the retailer with an "equal weight" rating and a $85 price target. 

"While we believe the business model is impressive, we see risk of near term downside for shares," analysts said.

One risk is that Victoria's Secret comps could drop to less than 3% next year.

In addition, there's uncertainty around margins near term, according to the firm's note.

TheStreet Recommends

Based in Columbus, OH, L Brands operates as a specialty retailer of women's intimate and other apparel, beauty and personal care products, and accessories. The company operates in three segments: Victoria's Secret, Bath & Body Works, and Victoria's Secret and Bath & Body Works International.

Separately, TheStreet Ratings team rates L BRANDS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

We rate L BRANDS INC (LB) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its solid stock price performance, growth in earnings per share, increase in net income, revenue growth and expanding profit margins. We feel its strengths outweigh the fact that the company shows weak operating cash flow.

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Investors have apparently begun to recognize positive factors similar to those we have mentioned in this report, including earnings growth. This has helped drive up the company's shares by a sharp 39.30% over the past year, a rise that has exceeded that of the S&P 500 Index. Regarding the stock's future course, although almost any stock can fall in a broad market decline, LB should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • L BRANDS INC has improved earnings per share by 7.9% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, L BRANDS INC increased its bottom line by earning $3.49 versus $3.05 in the prior year. This year, the market expects an improvement in earnings ($3.75 versus $3.49).
  • The net income growth from the same quarter one year ago has greatly exceeded that of the S&P 500, but is less than that of the Specialty Retail industry average. The net income increased by 8.0% when compared to the same quarter one year prior, going from $188.00 million to $203.00 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 9.8%. Since the same quarter one year prior, revenues slightly increased by 3.4%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • 44.38% 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. Regardless of the strong results of the gross profit margin, the net profit margin of 7.34% trails the industry average.
  • You can view the full analysis from the report here: LB