Victoria’s Secret: Hold Rating Amid Strategic Shifts and Uncertain Turnaround Timeline

Alexandra Straton, an analyst from Morgan Stanley, maintained the Hold rating on Victoria’s Secret (VSCO – Research Report). The associated price target is $20.00.

Alexandra Straton has given her Hold rating due to a combination of factors influencing Victoria’s Secret’s current market position. The new CEO’s insights into the evolving intimates industry, particularly the shift towards comfort and wireless bras, as well as the increased competition from value players, have been noted positively. However, despite these strategic insights, the company’s financial guidance has been lowered due to tariff impacts, which may not be fully mitigated yet.
Furthermore, while there are promising parallels between Victoria’s Secret’s strategic initiatives and those of other successful turnarounds, the expected timeline for these changes to take effect remains uncertain. The company’s recent earnings were in line with expectations, but there were concerns over gross margin misses and future earnings guidance. As a result, while there is a cautious optimism about the company’s direction, the potential risks and the time required for a successful turnaround justify maintaining a Hold rating for now.

In another report released yesterday, Telsey Advisory also maintained a Hold rating on the stock with a $24.00 price target.

Based on the recent corporate insider activity of 30 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of VSCO in relation to earlier this year.