What Happened?
Shares of intimate wear and beauty retailer Victoria’s Secret (NYSE: VSCO) jumped 4.3% in the afternoon session after it received positive attention from Wall Street analysts, including a new price target from JP Morgan.
On September 15, JP Morgan set a price target of $28.00 for the company. This followed a similar move on September 12 by Morgan Stanley, which increased its price target on the stock by 35% to $27.00 from a previous $20.00. While raising its price valuation, Morgan Stanley maintained its "Equal-Weight" rating on Victoria's Secret shares. The adjustments from two major analyst firms suggest a more optimistic outlook on the stock's value.
After the initial pop the shares cooled down to $27.75, up 4.9% from previous close.
Is now the time to buy Victoria's Secret? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Victoria's Secret’s shares are extremely volatile and have had 39 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 4.3% on the news that Morgan Stanley reiterated a cautious "Hold" rating on the stock, flagging concerns about future profitability and limited earnings visibility. The analyst, Alexandra Straton, acknowledged that Victoria's Secret's second-quarter results topped expectations, suggesting its turnaround efforts are gaining traction. However, the firm remains cautious, pointing to significant headwinds. The report highlighted that earnings before interest and taxes (EBIT) margins are still below historical averages and that management's third-quarter guidance was softer than expected. The analyst cited challenges from tariff pressures, increased marketing expenses, and rising labor costs. This cautious view appeared to overshadow more optimistic news from the previous day, when Jefferies raised its price target on the stock due to strong momentum.
Victoria's Secret is down 31.3% since the beginning of the year, and at $27.75 per share, it is trading 43% below its 52-week high of $48.71 from December 2024. Investors who bought $1,000 worth of Victoria's Secret’s shares at the IPO in July 2021 would now be looking at an investment worth $652.94.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story.
