Victoria’s Secret Faces Financial Challenges Amid Elevated Tariff Risks and Uncertain Performance

Wells Fargo analyst Ike Boruchow maintained a Sell rating on Victoria’s Secret today and set a price target of $14.00.

Ike Boruchow has given his Sell rating due to a combination of factors impacting Victoria’s Secret’s financial outlook. One of the primary concerns is the elevated tariff risk that seems to be underappreciated by the market. This risk is expected to exert significant pressure on the company’s margins, particularly as new tariffs on major sourcing countries like Indonesia, Vietnam, and Sri Lanka are anticipated to take effect, potentially impacting the company’s profitability in the coming years.
Additionally, Boruchow points out that while there might be some short-term upside in the second quarter due to improved traffic and promotional activities, the overall setup for the second half of the year appears challenging. The company’s ability to maintain its performance amidst these pressures is uncertain, leading to a lowered earnings per share forecast for 2025 and 2026. Consequently, the price target for Victoria’s Secret has been reduced, reflecting these concerns and the anticipated impact on future earnings.

Boruchow covers the Consumer Cyclical sector, focusing on stocks such as Victoria’s Secret, Bath & Body Works, and Deckers Outdoor. According to TipRanks, Boruchow has an average return of 6.0% and a 47.78% success rate on recommended stocks.