Victoria's Secret on Wall Street: analysts split, shares rise after the runway show
Needham sees the lingerie company early in a multi-year turnaround, while other banks are more cautious. On the Monday after the show, the stock gained just over three percent.
Photo: Harrison Keely / Wikimedia Commons, CC BY 4.0 (cropped and resized)
Video: YouTube · Victoria's Secret · youtube.com
Investment bank Needham initiated coverage of Victoria's Secret & Co. on October 16 with a Buy rating and a $106 price target. Analyst Tom Nikic described the company as being in the "early innings of a multi-year turnaround" and said earnings per share could double within five years, driven by management, assortment and marketing.
According to Investing.com, Needham also cites GLP-1 weight-loss drugs as a possible tailwind, since people who lose weight often buy new clothes. After the October 18 runway show in Los Angeles, the shares traded 1.6 percent higher overnight, according to Stocktwits, and closed Monday up 3.02 percent, Inside Retail reported. Benzinga said the stock has gained 197 percent over the past year. It has traded under the ticker VSXY instead of VSCO since June 2.
The backdrop is the second quarter: adjusted earnings per share came in at $0.95 against expectations of $0.75, while revenue of $1.61 billion was slightly below forecasts. The company raised its full-year sales outlook to $7.10 billion to $7.18 billion. Other banks are more cautious: UBS rates the stock Neutral with an $87 target, and BofA cut its target to $95 from $107. GlobalData's Neil Saunders said: "The strong numbers coming from Victoria's Secret speak for themselves." Victoria's Secret released a recap video of the show on October 21.