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Why Shares of L Brands Are Rising Today

By Rich Duprey – Updated Aug 20, 2020 at 12:13PM

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The retailer's robust earnings report is inspiring a lot of confidence.

What happened

Shares of L Brands (BBWI -3.49%) rose over 6% in morning trading Thursday after the owner of Victoria's Secret and Bath & Body Works reported better than expected second-quarter earnings.

So what

L Brands has been wracked by both the coronavirus pandemic and its attempt to shed the ailing lingerie brand, which continued to perform poorly in the latest period. Yet the Bath & Body Works personal-care retailer more than offset the Victoria's Secret decline, posting comparable-stores sales that surged 87% from the year-ago period for the time its stores were open in the quarter.

Interior of Bath & Body Works store

Image source: L Brands.

Now what

The performance revived the belief that once L Brands spins off the anchor that is Victoria's Secret, it will be a more robust business. Analysts who had hiked their price targets on the company three weeks ago after it revealed a cost-savings plan have increased them once again. 

Where the ceiling for L Brands stock was previously set at a high of $27 a share, it has been raised once again. Now Wall Street targets share prices anywhere between $33 and $40, a sizable step up from the $30 L Brands currently trades at.

Rich Duprey has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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