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|Beta (3Y Monthly)||N/A|
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Investors in growth stocks can spot a new entry point by looking for the three-weeks-tight, an unusual short-term chart pattern. Consider L Brands in 1982.
L Brands Inc (NYSE: LB) hosted an analyst day this week, and much of the focus was on the embattled Victoria’s Secret brand. The margin goal is unrealistic given changes in store productivity and the online mix, Bank of America Merrill Lynch analyst Lorraine Hutchinson said in a Wednesday note. BofA has a year-end operating margin forecast of 3.6% for Victoria’s Secret.
On the heels of Gap's February announcement that it would separate into two businesses, activist hedge fund and shareholder Barington Capital called for a similar move at L Brands LB . While investors sent Gap shares up more than 20% on the news that Old Navy would be a stand-alone business, we think such a breakup could be even more favorable for L Brands, given the lucrative 20%-plus operating margins of its Bath & Body Works segment and the upside that two distinctly focused businesses could create. Old Navy's same-store sales growth has already begun to slow and enterprise operating margin has contracted more than 500 basis points since 2013, a trend that might put such a transaction at risk.
The ascending base is a rare yet very bullish pattern. Look for it to form after a good stock has broken out of a cup or double-bottom base.
What should investors take away from Best Buy and L Brands earnings' reports? Jim Cramer rounds up retail and looks ahead to Foot Locker's earnings' report Friday before the bell.
Analyst Michael Binetti is not fully convinced, maintaining a Neutral rating with a $25 price target. The first quarter was another early signal of stabilization in L Brands' negative trends, he said.
U.S. stocks slumped on Thursday as investors dumped shares of companies in growth and cyclical sectors, with energy and technology leading declines, on fears that the escalating U.S.-China trade war would stymie global economic growth. Among S&P 500 sectors, only utilities and real estate, both considered defensive areas, registered gains as investors moved to safe-haven assets such as Treasuries. Stocks pared losses in the last hour of trading, but Wall Street's major indexes all ended more than 1% lower.
Shares of Lowe's Companies Inc. (LOW) tumbled 11.85% to $97.94 on Wednesday after missing consensus estimates on non-GAAP earnings for the first quarter of fiscal 2019 by 11 cents. It posted $1.22 per diluted share, a 2.5% increase from the prior-year quarter. Warning! GuruFocus has detected 2 Warning Signs with LOW.