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 (
) 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 solid stock price performance and expanding profit margins. However, as a counter to these strengths, we find that net income has been generally deteriorating over time.
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Highlights from the ratings report include:
- Compared to its closing price of one year ago, LTD's share price has jumped by 33.77%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, our hold rating indicates that we do not recommend additional investment in this stock despite its gains in the past year.
- LIMITED BRANDS INC's earnings per share declined by 32.9% in the most recent quarter compared to 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, LIMITED BRANDS INC increased its bottom line by earning $2.71 versus $2.42 in the prior year. This year, the market expects an improvement in earnings ($2.85 versus $2.71).
- 39.30% is the gross profit margin for LIMITED BRANDS INC which we consider to be strong. Regardless of LTD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 6.00% trails the industry average.
- LTD, with its decline in revenue, underperformed when compared the industry average of 9.6%. Since the same quarter one year prior, revenues slightly dropped by 2.4%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Specialty Retail industry. The net income has significantly decreased by 37.9% when compared to the same quarter one year ago, falling from $231.19 million to $143.65 million.
Limited Brands, Inc. operates as a specialty retailer of women's intimate and other apparel, beauty, and personal care products and accessories primarily in the United States and Canada. The company has a P/E ratio of 19.3, above the average retail industry P/E ratio of 19.1 and above the S&P 500 P/E ratio of 17.7. Limited has a market cap of $14.45 billion and is part of the
industry. Shares are up 21% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.