L Brands reported a fourth-quarter earnings beat on in-line revenue
The shares of L Brands Inc (NYSE:LB) are down 6.4% at $25.64 in early trading, after the retailer reported weak fourth-quarter Victoria's Secret sales and a 2019 profit forecast that fell short of analysts' expectations -- offsetting a quarterly earnings beat and in-line revenue. The equity is now headed for its third straight loss.
LB stock has taken a beating over the past year, amid a series of bear gaps. Plus, a mid-December rejection at the $38 level -- a familiar ceiling -- pushed the stock down to an eight-year low of $23.71 on Dec. 24. Rebound attempts have stalled in the $28 neighborhood, currently home to the stock's 60-day moving average.
Analysts are feeling lukewarm on L Brands, with 12 giving it a "hold" rating. Five consider LB a "strong buy" and two have given it a "sell" or worse rating. There's room for price-target cuts, too, with the consensus 12-month target price of $33.20 a 29.8% premium to current levels. Earlier today, Credit Suisse cut its price target to $25 from $30, saying the retailer "lacks a clear VS diagnosis."
Short-term options traders are much more put-heavy than usual, per LB's Schaeffer's put/call open interest ratio (SOIR) of 2.17, which sits in the 88th percentile of its annual range. This skew is likely due to the heavily populated May 20 put option, where a block of 15,000 contracts was bought to open on Tuesday at 30 cents apiece.