Victoria’s Secret (VSCO) shares have seen movement recently, prompting investors to review the retailer’s performance and outlook. The company’s stock is up 59% over the past 3 months, which reflects renewed interest among market watchers.
See our latest analysis for Victoria’s Secret.
After a bumpy start this year, Victoria’s Secret has staged an impressive comeback, with a 26% one-month share price return and momentum building as renewed industry optimism takes hold. While the year-to-date share price is still lower, long-term shareholders have captured a 16.9% total return over the past year.
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With the stock’s recent surge but analyst targets lagging behind, the question is whether Victoria’s Secret remains undervalued, or if the current price already factors in all the anticipated future growth.
The most widely followed narrative puts Victoria’s Secret’s fair value well below its last close price, signaling a potential disconnect between analyst models and recent market enthusiasm.
The analysts have a consensus price target of $22.7 for Victoria’s Secret based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $27.0, and the most bearish reporting a price target of just $17.0.
Read the complete narrative.
Curious what kind of growth projections and future profit assumptions drive this punchy valuation? The key takeaway is that most analyst forecasts are based on slow revenue growth, thinning margins, and a higher-than-normal profit multiple. Which number is the real linchpin? The full narrative reveals the bold assumptions behind the current fair value.
Result: Fair Value of $22.70 (OVERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, persistent tariff pressures or a sustained slowdown in mall traffic could quickly undermine the optimistic case for Victoria’s Secret’s recovery.
Find out about the key risks to this Victoria’s Secret narrative.
While analyst models suggest Victoria’s Secret is overvalued versus consensus estimates, our SWS DCF model points in a different direction. Based on projected future cash flows, the stock currently trades 21.6% below its fair value, which suggests potential upside. Which perspective will the market ultimately reward?