Report
Jaime Katz
EUR 100.00 For Business Accounts Only

Lopsided Performance of L Brands' Segments Warrants the Assessment of a Spin-Off; Shares Undervalued

On the heels of no-moat Gap’s February 2019 announcement that it would carve into two separate businesses, activist hedge fund and shareholder Barington Capital has called for a similar push at narrow-moat L Brands. While investors sent Gap shares up more than 20% on the news that Old Navy would be a stand-alone business, we contend that such a breakup could be even more favorable for L Brands given the lucrative plus-20% operating margin performance its Bath & Body Works segment generates a...
Underlying
L Brands Inc.

L Brands is a holding company. Through its subsidiaries, the company is a specialty retailer of women's intimate and other apparel, personal care, beauty and home fragrance products. The company sells its merchandise through company-owned specialty retail stores in the U.S., Canada, the U.K., Ireland and Greater China, and through its websites and other channels. The company's other international operations are primarily through franchise, license and wholesale partners. The company has three reportable segments: Victoria's Secret, Bath & Body Works and Victoria's Secret and Bath & Body Works International. The company operates the following retail brands: Victoria's Secret, PINK and Bath & Body Works.

Provider
Morningstar
Morningstar

Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.

Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.

We have operations in 27 countries.

Analysts
Jaime Katz

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