From: Richard Kahn Sent: Thursday, May 17, 2018 1:35 PM To: Jeffrey E. Subject: ML on L Brands.. L BRANDS: SELL. MARGIN PRESSURES TO CONTINUE. PO TO $29 = =NOTHER 15% DOWNSIDE. LB has more than halved since =orraine's initial downgrade late 2016 & she thinks there is =ore downside. Lowering F2018EPS by another $0.16 to $2.88 = further =argin pressures. Mgmt. continues to struggle at reshifting focus amidst =tructural changes. Missed original VS operating income target bt 14% in =017. Continuing to try various things in hope of turnaround confirms =ncertainty = more promotions to drive traffic, back to testing =atalogues, another swim exit etc. Lorraine thinks they will guide 2Q =elow consensus. We're at 38c = EPS •20% and is 10% below =onsensus. $29 PO = llx new estimates, 15% below consensus on =Y2020. Note. Richard Kahn HBRK Associates Inc. 575 =exington Avenue 4th Floor New York, NY 10022 1 EFTA_R1_01915805 EFTA02665400