Victoria's Secret (VSCO): Assessing Valuation After a 28% Share Price Surge

Victoria's Secret (VSCO) shares have seen significant swings over the past month, climbing nearly 28% even as retail stocks face mixed sentiment. Investors are weighing recent performance trends against the company's evolving positioning in the competitive apparel market.

See our latest analysis for Victoria's Secret.

The recent surge in Victoria's Secret's share price, especially the impressive 28% jump over the past month, stands out after a tough start to the year. While the 1-year total shareholder return is just about positive, shorter-term momentum has picked up sharply and signals renewed optimism around the company’s future moves.

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With such a sharp rebound, the key question for investors becomes whether Victoria's Secret is now trading below its true value, or if recent gains mean the market is already anticipating all the good news ahead. Is there still room to buy in, or are expectations already reflected in the stock price?

Most Popular Narrative: 25% Overvalued

The most widely followed narrative places Victoria's Secret's fair value at $29, while the last close price stands notably higher at $36.32. This sets the stage for a debate over whether the brand’s ambitious transformation can justify its current market premium.

The ongoing transformation of Victoria's Secret toward inclusivity, body positivity, and enhanced storytelling continues to resonate with younger customers and drive new customer acquisition, especially among the 18-44 demographic. This supports sustained revenue and market share growth.

Read the complete narrative.

Want to unpack why this premium valuation exists? The heart of this narrative is a bold bet on lasting appeal to new customer segments. Can management’s vision really shift the long-term growth curve? Dive into the full narrative for the key financial forecasts that anchor this high-stakes valuation.

Result: Fair Value of $29 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent tariff pressures and reliance on physical stores may slow progress and challenge Victoria's Secret in sustaining long-term earnings growth.

Find out about the key risks to this Victoria's Secret narrative.

Another View: What Does the SWS DCF Model Say?

While many see Victoria's Secret as overvalued based on analyst targets, our SWS DCF model tells a different story. According to this approach, the shares trade about 21% below their estimated fair value. This suggests upside potential, but which method will prove more accurate as the company evolves?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Victoria's Secret for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 861 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Victoria's Secret Narrative

If you'd rather see the numbers firsthand or wish to craft your own viewpoint, you can put together a unique narrative in just a few minutes. Do it your way

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.

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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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