Limited Brands’ Stock Could Get Boost from Victoria’s Secret International Stores
Limited Brands (NYSE:LTD), a specialty apparel retailer focused on lingerie, beauty and personal care products, competes with retailers like Abercrombie & Fitch (NYSE:ANF), American Eagle (NYSE:AEO), AnnTaylor (NYSE:ANN), Gap (NYSE:GPS), and J.Crew Group (NYSE:JCG). Some of its popular brands include Victoria’s Secret in the lingerie business and Bath & Body Works in the personal care segment. We currently have a Trefis price estimate of $30.63 for Limited Brands’ stock, about 17% above the current market price of $26.13.
Trefis members have created forecasts for two key drivers of Limited Brands’ (NYSE:LTD) stock over the last week: (1) Number of Victoria’s Secret International Stores and (2) Victoria’s Secret International Revenue per Square Foot. The members’ forecasts suggest that Number of Victoria’s Secret International Stores will trend higher than the Trefis forecast, while Victoria’s Secret International Revenue per Square Foot will be roughly in line. These projections suggest minimal upside to Limited Brands’ stock.
We estimate that Victoria’s Secret Direct & International division constitutes around 20% of the $30.63 Trefis price estimate for the LTD stock. Hence the stock is quite sensitive to (1) Number of Victoria’s Secret International Stores and (2) Victoria’s Secret International Revenue per Square Foot. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
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1. Number of Victoria’s Secret International Stores
The average of forecasts for Number of Victoria’s Secret International Stores created by Trefis members indicated a projected increase from around 14 in 2010 to around 53 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from 13 in 2010 to 43 by the end of the Trefis forecast period. The member estimates imply an upside of 1% to the Trefis price estimate for Limited Brands’ stock. Victoria’s Secret International Stores were launched in 2009 with 4 stores.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Limited Brands’ stock to Number of Victoria’s Secret International Stores.
Our complete analysis for Number of Victoria’s Secret International Stores is here.
2. Victoria’s Secret International Revenue per Square Foot
The average of forecasts for Victoria’s Secret International Revenue per Square Foot created by Trefis members indicated a projected increase from around $1,555 in 2010 to $1,813 by the end of the Trefis forecast period, compared to the baseline Trefis estimate of an increase from around $1,555 in 2010 to $1,856 by the end of the Trefis forecast period. The member estimates imply very little downside to the Trefis price estimate for Limited Brands’ stock. Victoria’s Secret International Revenue per Square Foot was $1,453 in 2009.
You can drag the forecast trend-line above to express your own view, and see the sensitivity of Limited Brands’ stock to Victoria’s Secret International Revenue per Square Foot.