Victoria’s Secret (VSCO) has caught the attention of investors following recent moves in its stock price. The past month has delivered a gain of 11%, while the past three months show a 69% jump. This reflects strong market interest.
See our latest analysis for Victoria’s Secret.
Victoria’s Secret has surged into the spotlight with momentum building over the past quarter. While the 90-day share price return stands out at nearly 69%, the stock still posts a negative total shareholder return of just over 1% in the past year. That recent burst of optimism suggests investors may be betting on a turnaround or re-rating of the brand as sentiment shifts from last year’s sluggish run.
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But with shares now well above most analyst targets and only a modest lift in annual revenue, the key question is whether Victoria’s Secret is now trading at a bargain or if the market has already factored in stronger future growth.
Compared to Victoria’s Secret’s last close price, the most widely followed narrative places fair value much lower, signaling the recent rally has pushed shares well above what consensus numbers support. The narrative sets a clear calculation for why this is the case.
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.
Could a slowdown in earnings and a high projected profit multiple really justify the gap between narrative value and market price? The assumptions driving this calculation center on how the company will balance modest revenue growth with tighter margins in the coming years. See what’s behind the numbers.
Result: Fair Value of $22.7 (OVERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, persistent tariff pressures and ongoing declines in mall traffic could still threaten Victoria’s Secret’s ability to sustain recent gains and margin improvements.
Find out about the key risks to this Victoria’s Secret narrative.
Our SWS DCF model puts Victoria’s Secret’s fair value at $48.49, which is well above the current share price. This suggests shares could be undervalued if the underlying cash flow assumptions play out. The key question is whether these longer-term projections can offset concerns about slower earnings growth.