L Brands shares rise after upgrade on 2018 earnings growth potential

L Brands Inc. shares rose 2% in Tuesday premarket trading after it was upgraded to outperform from neutral at Baird Equity Research on the company's 2018 earnings-per-share growth potential. Baird raised its price target to $70 from $60. Analysts led by Mark Altschwager think the Victoria's Secret brand "is turning a corner under new leadership" and there's "steady momentum" at Bath & Body Works. Baird expects Victoria's Secret to exceed December same-store sales and fourth-quarter EPS expectations thanks to solid traffic and sales. Recent tax reforms should be a tailwind. And Baird is bullish about the company's store strategy, which includes selective expansion of Victoria's Secret square footage in order to grow core categories. Analysts note that the majority of stores don't carry the full lingerie or popular Pink collections. L Brands shares are down 8.5% for the last year while the S&P 500 index is up 19.4% for the period.

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