I actually see a lot of good value in retail (CMRG, BIDZ, BBW, etc.), but a lot of the retail universe seems way overbought, and Limited looks like one of them. Over the past 3 years, book value has dropped by 35%, debt has gone up by 50%, revenues have dropped by 15+, and earnings have been reduced significantly. Yuck.

Limited is down to 2 core businesses (after selling off many others), just Victoria's Secret and Bath & Body Works remain. Problem with these two businesses, is that they are commodity businesses at this point. Everyone sells the same stuff. Macy's, JCP and all the department stores have set up their own lingerie departments, everyone and their mother sells body lotions and beauty products. It's a price takers business now. So while Limited has been good about cutting costs (like everyone else) to support earnings, what is their edge to grow earnings going forward? What is their edge? Some brand recognition yes, but it's a crap economy, and consumers are focused on price...

I just don't see how this company, so debt laden and debt continues to grow to support the business ($3bn+ now), have ability to grow earnings meaningfully long term to be able to justify at $20 stock price. They need to earn $1.35 a share (at 15x P/E) just to maintain. They haven't made that much in years, and being dependent on just 2 business lines now, it seems unlikely.

I've seen brokers both upgrade and downgrade the stock recently and there seems to be very split views out there.

Thoughts out there? Is there something fundamental I'm missing from the big picture?

Cheers all.