According to Goldman Sachs, Limited Brands is upgraded to Neutral.
Goldman Sachs said that its Sell rating last fall was based on its view that LTD’s 2010 growth pace was unsustainable and would slow dramatically when key process changes were lapped early this year.
“We were wrong. While merchandise margin expansion has largely leveled off, same store sales momentum has accelerated on an absolute and relative basis vs. these tougher compares. We believe we underestimated both LTD’s continuing improvements in execution as well as the strength of the innovation cycle in intimates, a category they dominate. Since we downgraded to Sell on 10/1/10 LTD is +48 vs. our coverage +26%. LTM LTD is +66% vs. our coverage +33%.”
Limited Brands closed on Friday at $39.66.
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