L Brands Inc. was upgraded to overweight from sector weight at KeyBanc Capital Markets on the increased potential of a “value-creating transaction” as the company’s Victoria’s Secret brand continues to languish. KeyBanc has a $25 price target. Analysts note the “stark differential” in performance between the lingerie brand and L Brands’ beauty chain, Bath & Body Works, and the “lack of any discernable turnaround” at Victoria’s Secret. KeyBanc says Bath & Body Works would be attractive on its own after eight consecutive quarters of same-store sales of 5% or more, and 9% same-store sales growth over the holidays. Analysts see the value in turning around the Victoria’s Secret business, which still has $2.8 billion in revenue despite recent declines, a powerful brand and the Pink brand. But analysts think the turnaround could be better achieved as a private entity. L Brands stock has sunk 26.8% over the last year while the S&P 500 index is up 24.3% over the period.
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