Jefferies analyst Randal Konik lowered his price target for L Brands to $16 from $21 and keeps an Underperform rating on the shares following the retailer’s Q4 results. The analyst sees L Brands’ earnings being negatively impacted by “too many” stores, a Pink business that is “unraveling,” and “peaking” margins at Bath & Body Works. This means sales will turn lower, gross margins will be pressured and SG&A will delever, Konik tells investors in a research note. He believes the shares could still lose more than 50% of their value from current levels, with downside to $10. L Brands in late morning trading is down 8%, or $2.20, to $25.20. Management’s guidance does not factor in a “big leg down” in Pink and “beginning leg down” in Bath & Body, which will occur over the next two fiscal years, Konik contends.
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