Victoria’s Secret gets UBS upgrade as turnaround gains traction

December 11, 2024 06:41 AM AEDT | By Investing

Google News:

Victoria’s Secret gets UBS upgrade as turnaround gains traction

Recent News

Engenco’s (ASX:EGN) Acquisition Moves Forward with Elph Investments

AML3D (ASX:AL3) Expands U.S. Footprint with Ohio Facility to Strengthe...

Austmine & Austrade Boost Opportunities for METS Sector in Indonesia

WA Doubles Strategic Industries Fund to $1B in Push to Boost Industria...

Investing.com -- Victoria’s Secret&Co has been upgraded to "neutral" from "sell" by UBS, reflecting growing confidence in the retailer’s turnaround under its new CEO. The investment bank also raised its price target for the stock to $47, up from $18, citing improved performance and long-term growth potential.

The company’s North American sales showed signs of recovery in the third quarter, rising 3% year-on-year after a 3% decline in the previous quarter. This outpaced the broader intimate apparel market, which saw a slight drop, suggesting that Victoria’s Secret is regaining market share, UBS noted.

UBS highlighted the company’s strategic focus on innovative products and differentiation, projecting steady mid-single-digit sales growth through 2025. Strong third-quarter results and an optimistic holiday outlook prompted the bank to increase its earnings forecasts for 2024-2026 by 15-20%.

However, the report also warned of challenges ahead, including potential sales slowdowns after the holiday season and growing competition from emerging brands and discount retailers, which could pressure both sales and profit margins.

UBS’s new $47 price target is based on a price-to-earnings multiple of 15 times its 2026 earnings forecast of $3.05 per share, reflecting reduced risk and an improving economic environment.

Earlier, Wells Fargo downgraded the stock to "equal weight" from "overweight," citing limited upside following a sharp rally this year. While Wells Fargo acknowledged the progress under new CEO Hillary Super, including product revamps and rebranding efforts, it flagged challenges in sustaining margin improvements.

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.