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Nov. 23, 2019, 9:57 a.m. EST

Victoria’s Secret Fashion Show canceled as talk of a spinoff or Bath & Body Works IPO arises again

Breaking up L Brands has it its pros and cons, analysts say

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By Tonya Garcia, MarketWatch

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“We forecast this move will unlock value for shareholders and allow L Brands to sharpen strategic focus and tailor operational structures.”

CFRA has a 12-month target of $18, down from $21.

See: As Amazon races to deliver in a day, Target drives digital customers to stores

Wedbush analysts led by Jen Redding don’t think a spinoff is a good idea.

“While we do not feel that a spinoff is the right course of action, conflict of board loyalty is a sideliner for us, as we would look for meaningful management changes before becoming more constructive,” they said.

Wedbush rates L Brands neutral with a $16 price target.

MKM Partners Managing Director Roxane Meyer didn’t comment directly on either a spinoff or IPO, but says the fourth quarter could be a turning point for the company.

“While it is still in a very early stage of implementing strategic changes to merchandise and marketing, we believe the outcome of Q4 will guide decisions relating to more radical portfolio changes and dividend policy,” MKM wrote.

Don’t miss: Macy’s should become like TJX and focus on off-price retail: CFRA

MKM rates L Brands neutral with a $17 price target, down from $21.

L Brands stock has slumped 40% over the past year while the S&P 500 index /zigman2/quotes/210599714/realtime SPX +0.75%   is up 17.4%.

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Tonya Garcia is a MarketWatch reporter covering retail and consumer-oriented companies. You can follow her on Twitter @tgarcianyc. She is based in New York.

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