Analyst raises Limited Brands targets

NEW YORK

A Barclays Capital analyst on Friday raised his targets for Limited Brands Inc., saying the retailer will return more cash to shareholders this year.

Sales for its stores like Victoria's Secrets and Bath & Body Works started this year better than last year, analyst Jeff Black told clients in a note Friday.

He raised his target share price to $33 from $26.

Earlier this week the company declared a special dividend of $1 per share and authorized a share repurchase program of $200 million. Black said the company will likely return more than $700 million to shareholders this year. That's up from $200 million in 2009.

"We think the share repurchase is a conservative start and see (Limited) returning $500 million annually for the next few years," he said.

He also said Limited Brands, based in Columbus, Ohio, has lowered its overall debt by $400 million, to $2.5 billion and made other changes to its debt in the past year.

Black raised his 2010 earnings per share estimate to $1.63 from $1.60, which is a dime higher than the average expectation of analysts, according to Thomson Reuters. For fiscal 2011, his estimate goes to $2 from $1.90. Analysts on average expect earnings per share of $1.75 in the next fiscal year.

Shares of Limited Brands fell 16 cents to $24.59 in afternoon trading Friday.