Can Analyst Optimism Sustain Victoria’s Secret’s (VSCO) Transformation Amid Sector Headwinds?

• Recently, Victoria’s Secret experienced a surge in analyst optimism from several major Wall Street firms, reflecting increased confidence in its outlook despite ongoing sector challenges.
• This shift in sentiment comes at a time when analysts remain cautious about the company’s earnings growth and ability to navigate competitive and macroeconomic pressures.
• We'll explore how this renewed analyst confidence could influence Victoria’s Secret's investment narrative and its prospects for sustained brand transformation.

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Victoria's Secret Investment Narrative Recap

To be a shareholder of Victoria’s Secret today, you need to be positive on its turnaround story, led by renewed brand direction, store investments, and omnichannel momentum, while accepting that earnings growth remains constrained by intense competition and macro pressures. The recent surge in analyst optimism, including price target increases from Telsey Advisory Group, JP Morgan, and Morgan Stanley, reinforces the brand transformation catalyst, but does not materially alter the ongoing risk from tariff exposure in the short term.

Among recent announcements, the opening of a new Washington, D.C. store signals further commitment to refreshed retail concepts and direct customer engagement. This is relevant given that physical retail upgrades are key to supporting brand transformation, yet the company still faces challenges from secular declines in mall traffic, which remains a significant risk to realizing these catalysts.

Yet, while analyst optimism points one way, a contrasting risk investors should be aware of is persistent tariff headwinds that could...

Read the full narrative on Victoria's Secret (it's free!)

Victoria's Secret is projected to reach $6.7 billion in revenue and $143.6 million in earnings by 2028. This outlook is based on an expected annual revenue growth rate of 2.2%, but reflects a decrease of $7.8 million in earnings from the current $151.4 million.

Uncover how Victoria's Secret's forecasts yield a $24.90 fair value, a 14% downside to its current price.

Exploring Other Perspectives

Six Simply Wall St Community members placed their fair value estimates for Victoria’s Secret between US$20.79 and US$33.48 per share. While some favor global expansion and brand innovation, others warn that tariff and earnings risks could weigh on future performance. Consider these different viewpoints as you assess your own outlook.

Explore 6 other fair value estimates on Victoria's Secret - why the stock might be worth 29% less than the current price!

Build Your Own Victoria's Secret Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Victoria's Secret research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Victoria's Secret research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Victoria's Secret's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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