Why L Brands Inc (LB), LinkedIn Corp (LNKD) and Twitter Inc (TWTR) Are 3 of Today’s Worst Stocks

Advertisement

The bulls did what they could on Friday afternoon before sliding back to just a so-so close, hoping to bring stocks back a bit from the brink of the cliff’s edge they were teetering on at the close of business on Thursday. By the time the closing bell rang though, most of that work was all for naught. The S&P 500 ended the day at 2047.6, up a modest 0.28%.

Why L Brands Inc (LB), LinkedIn Corp (LNKD) and Twitter Inc (TWTR) are 3 of Today's Worst StocksFor L Brands Inc (NYSE:LB), LinkedIn Corp (NYSE:LNKD) and Twitter Inc (NYSE:TWTR), it was even worse. These three names ended the session rather deep in the red, meriting a closer look.

Here’s what happened.

L Brands Inc (LB)

Last month’s same-store sales for L Brands — the company that owns Victoria’s Secret — were solid enough, up 3% versus weaker average numbers from all other comparable retailers. But, neither the strong March nor the news from the company were able to keep LB shareholders optimistic enough to prop the stock up on Friday.

In short, L Brands is restructuring its Victoria’s Secret division, which is the gentle way of saying it’s scaling back on that particular brand, culling some fringe product categories. Along with the revamp, roughly 200 jobs will likely be eliminated. In some cases, traders celebrate such a move, calling it a refocus on a company’s most important elements. In this case though, it’s being viewed as little more than a retreat from a losing battle.

LB ended the day down more than 4%.

LinkedIn Corp (LNKD)

LinkedIn was on the bad side of a new analyst opinion in Friday … two of them, actually.

Credit Suisse got the ball rolling on Wednesday, cutting its target price on LNKD from $230 to $176 on margin-compression worries despite maintaining its “Outperform” rating on the stock.

The comments nudged LNKD a little lower at the time, but with the headwind already in place, an MKM downgrade easily drove LinkedIn shares nearly 4% lower on Friday. The basis for the MKM downgrade, from a “Buy” to “Neutral,” was the likelihood of slowing job growth in the foreseeable future. MKM also set a target price of $130 for LNKD shares.

Twitter Inc (TWTR)

Finally, Twitter also found itself on the wrong side of a new analyst opinion on Friday.

It’s not exactly a big secret that microblogging site Twitter is struggling, particularly with user growth. That didn’t prevent Morgan Stanley from reiterating that point again today, though, sending TWTR shares close to 2% lower as a result.

It wasn’t prompted by any news or updated company reports. In fact, the lowered opinion of TWTR came just a few days after Twitter announced it won rights to stream an NFL game this year. Morgan Stanley simply sees lingering headwinds for the microblogging site even with the NFL news.

Morgan Stanley analyst Brian Nowak explains:

“[the company has yet to] break into the mass market … [which] makes us wary of Twitter’s addressable audience, and the question marks around the company’s ability to drive future user growth appear unlikely to go away in the near term.”

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/04/why-l-brands-inc-lb-linkedin-corp-lnkd-and-twitter-inc-twtr-are-3-of-todays-worst-stocks/.

©2024 InvestorPlace Media, LLC