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Comparing L Brands’ PE Multiple with Peers’

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Dec. 4 2020, Updated 10:53 a.m. ET

Comparing PE multiples

On January 8, L Brands’ (LB) 12-month forward PE ratio was 10.4x. Meanwhile, Abercrombie & Fitch (ANF), American Eagle Outfitters (AEO), Urban Outfitters (URBN), and the Gap (GPS) have PE ratios of ~18.7x, 12.3x, 11.2x, and 9.5x, respectively.

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EPS estimates for L Brands

For 2018, Wall Street analysts expect L Brands’ adjusted EPS to fall 15.6% year-over-year to $2.70. Rising expenses and lower operating income could continue to mar the company’s bottom line. Lower provisions for taxes and top-line growth could offer some support to its bottom line.

For 2018, L Brands’ management expects its adjusted EPS at $2.60–$2.80 versus the $2.45–$2.70 it previously guided.

For 2019, analysts expect the company’s adjusted EPS to rise 1.1% year-over-year to $2.73.

A look at EPS projections for peers

Analysts expect Abercrombie & Fitch’s adjusted EPS to increase 46.2% year-over-year to $0.95 in fiscal 2018. For fiscal 2019, its EPS are expected to grow 18.9% year-over-year to $1.13.

American Eagle Outfitters’ analysts’ adjusted EPS growth estimate for fiscal 2018 stands at 26.7% to $1.47. For fiscal 2019, its EPS are forecast to grow 9.5% to $1.61.

For fiscal 2019, Wall Street projects that Urban Outfitters’ adjusted EPS will increase 73.4% to $2.73. For fiscal 2020, its EPS are forecast to rise 7.3% to $2.93.

For Gap’s fiscal 2018, analysts project EPS to be up 20.2% to $2.56, and for fiscal 2019, EPS are projected to increase 3.5% to $2.65.

Increases in sales and benefits from reduced tax rates are expected to benefit the bottom lines of these apparel retailers.

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