After Declining 3% Over The Last 5 Days, Is L Brands Stock Ripe For A Further Drop?

January 15th, 2021 by Trefis Team
LB: LandBridge Co logo
LB
LandBridge Co

While L Brands (NYSE:LB) stock, a women’s intimate apparel, personal care, and beauty products retailer, has rallied by a solid 18% over the last 10 trading days – driven by its better-than-expected Q3 momentum – but has declined by around 3% over the last 5 trading days. In comparison, the broader S&P 500 returned almost flat growth over the last 5 trading days. Now, is L Brands stock poised to decline further? We believe the company remains fundamentally overvalued, trading at about 14x consensus 2021 earnings, and the company’s stock could decline going forward. Specifically, there is a 53% chance of a drop in L Brands stock over the next month (21 trading days) based on our machine learning analysis of trends in the stock price over the last 5 years. See our analysis on L Brands Stock Chances of Rise for more details. Curious about the possibility of rising over the next quarter? Check out the L Brands Stock AI Dashboard: Chances Of Rise And Fall for a variety of scenarios on how LB stock could move.

5D: LB -2.6%, vs. S&P500 -0.03%; Underperformed market

  • L Brands stock dropped 2.6% over a 5-day trading period ending 1/14/2021, compared to the broader market (S&P500) drop of 0.03%
  • A change of -2.6% or more over 5 trading days is a 30% likelihood event, which has occurred 377 times out of 1256 in the last 5 years

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10D: LB 18%, vs. S&P500 1.9%; Outperformed market

  • L Brands stock rose 18% over the last 10 trading days (2 weeks), compared to the broader market (S&P500) rise of 1.9%
  • A change of 18% or more over 10 trading days is a 9% likelihood event, which has occurred 119 times out of 1240 in the last 5 years

While L Brands stock may not be attractive now, 2020 has created many pricing discontinuities that can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Amazon vs Etsy. 

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