Q: Could you please comment on Earnings for $L
5i Research Answer:
L’s operating resulta have been quite consistent and it is now trading at 16x times' Forward P/E. In the 1Q, L’s revenue grew 6% to $13B, slightly missing the estimates of $13.15B and EPS was $1.55 in line with estimates. The balance sheet is quite leveraged, with net debt of $15.8B. Total debt is around 3.3x times trailing twelve-month cash flow of $4.8B, and cash flow remain mostly flat compared to last year. Based on consensus estimates, sales are expected to grow by 3%-5% over the next few years. Overall, a good result in the quarter. The company has accelerated repurchasing shares recently which we like, and we would be comfortable adding here.