Limited Brands (NYSE:LTD) Has Strong Margin and Topline Upside says UBS (NYSE:UBS)

UBS (NYSE:UBS) says Limited Brands (NYSE:LTD) should have no problem meeting their OM goal by 2012, as they maintain their "Buy" rating on the retailer.

UBS said, "We are increasingly confident in LTD’s ability to hit (or surpass) its 15% OM goal by ’12. In Q3, both VS and BBW - doubled their operating margin and profit dollars (BBW: best Q3 in history). We believe the company is also increasingly benefiting from the contribution of international stores (Other profit shrink falling)."

Earnings for Limited for the full year was over four times the prior year, sending shares of the company soaring.

After the earnings report, Limited also took every right step to show they have enormous confidence going forward. They increased their full-year earnings estimate to a range of $1.82 to $1.97 a share, from $1.68 to $1.83. And also declared a $3 dividend while announcing a $200 million stock buyback plan.

UBS is even more bullish, raising their earnings per share estimate for the full year 2011 from $1.93 to $1.95 and for full year 2012 from $2.14 to $2.18.

Limited closed Thursday at $33.26, rising by $1.39, or 4.36 percent. UBS has a price target on them of $37, increasing it from $35.