L BRANDS (LB)

EARNINGS RELEASE WEDNESDAY- MAY 22 (AMC)

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Jump Report

Avg Daily Volume: 4,573,281    Market Cap: 6.18B 
Sector: Services    Short Interest: 5.18

EARNINGS EXPECTATIONS:   

ESTIMATED     EPS:  .0/share      REV:  2,560/M

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   LAST QTR:  EPS: 2.14/share    ESTIMATED: 2.07/share  (BEAT)
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   NEXT QTR: EPS: .23/share    REV: 2,940/M
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   FY19:  EPS:  2.39/share    REV: 13,400/M
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*These are the base metrics we will be watching against the actual release numbers

BEAT/MISS HISTORY: 68% OF THE TIME THEY BEAT ESTIMATES

PRIOR ‘JUMP ZONE’ MOVES (3 QTRS %) -9.59, 6.45, -12.13

POTENTIAL JUMP MOVE:   12-15%

Links To Latest News and Headlines

19 Oct, 2020 @ 16:28 by Yahoo! Finance

Markets in the red, shares of Halliburton jumps on quarterly results

17 Oct, 2020 @ 01:43 by Yahoo! Finance

The list of retailers saying they will close this Thanksgiving is piling up.

In its latest business update, L Brands reported sales growth at Bath & Body Works and announced a 15% headcount reduction at the corporate headquarters.

30 Jul, 2020 @ 14:47 by Yahoo! Finance

JPMorgan analyst Matthew Boss raised L Brands' (LB) stock rating to Buy from Hold on Wednesday, after the company provided a separation update related to Victoria’s Secret and Bath & Body Works. Boss also lifted his price target to $32 (23.6% upside potential) from $14.Shares are down 2.4% in Thursday's pre-market trading after jumping 35.4% to $6.76 on Wednesday.On July 28, L Brands divided Victoria’s Secret and Bath & Body Works into two independent companies. In addition, L Brands said it expects Bath & Body Works 2Q sales to rise by a preliminary 10% and Victoria’s Secret sales to fall by 40%.Boss believes that the Bath & Body Works division represents the “best current [comparison] story” in brick-and-mortar retail. He further added in a commentary cited by Bloomberg that Bath & Body Works would likely have “a sustainable double-digit stand-alone bottom-line growth profile.”On July 29, KeyBanc analyst Edward Yruma raised his price target to $28 (8.2% upside potential) from $25, saying that “Bath & Body Works remains one of the best stories in consumer/ retail”. He added that “unlike at the beginning of the pandemic (when soaps and sanitizers outperformed), Bath & Body Works’ strong sales results are being driven across its product suite.”Currently, the Street has a cautiously optimistic outlook on the stock. The Moderate Buy analyst consensus is based on 8 Buys, 7 Holds, and 2 Sells. The average price target of $22.13 implies downside potential of 14.5%. (See LB stock analysis on TipRanks).Related News: FireEye Pops 18% As JPMorgan Lifts PT McDonald’s PT Gets A Lift From JPMorgan Morgan Stanley Lifts Price Target On Tesla Stock More recent articles from Smarter Analyst: * Exxon Is Said To Prepare Spending, Job Cuts To Save Dividend; Shares Drop * Citigroup Turns Bullish On American Eagle * BMO Capital Lifts Amazon's PT Ahead OF 2Q Earnings * Procter & Gamble Tops 4Q Street Estimates

Analysis and trade direction are uploaded generally between noon and 1pm EST for most events. ALWAYS check back near market close for updates as the analysis can change by end of session.

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ANALYSIS:

StockJumpers trajectory analysis reveals a less than positive reaction to the earnings release. The company the owner of Victoria’s Secret and other iconc brands has been printing multi-year lows and we were looking for a pop on positive release news. This may not be their quarter. They are expected to announce .0 profit per share against 2.5 billion in revenue, which they may meet, but all eyes are on next quarter and FY19 results. 

Our preliminary analysis based on the data collected is a negative response, but this is not conclusive. We are biased SHORT on the event at this writing. 

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TRADE PLAN:

ENTRY:  SELL – end of day (may be revised)
STOP LOSS:  NA
TAKE PROFIT: 8%
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UPDATE: (2:43PM) We remain biased short. Our latest review of the data, suggests a negative reaction as previously reported. The concern here is that the stock has been tanking all day is is down 5% from open which means the move may be priced in. Also they are printing NEW multi-year lows, even though it could go lower. 

POST RELEASE ACTION:  They beat on both, but the forward for next quarter is below expectations. We will take a loss on this one…  (no follow on trade)

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NOTE: There is a significant amount of data behind the scenes in getting to the analysis in the tab above. Too much information for traders only confuses things – so this is striped down to only what it needed to make the best possible decision(s) on trading the trajectory.