What Happened?
Shares of intimatewear and beauty retailer Victoria’s Secret (NYSE: VSCO) jumped 7.6% in the afternoon session after investment bank UBS upgraded the company's stock to 'Buy' from 'Neutral'. The bank also significantly raised its price target on the shares to $46 from $25. In the upgrade, analysts pointed to increased confidence in the brand's repositioning and the belief that the company's turnaround was gaining traction. UBS stated it expected sustained sales growth after several years of declines as management worked to restore growth. Adding to the positive sentiment, Goldman Sachs also raised its price target, though it maintained a 'Neutral' rating on the stock.
Is now the time to buy Victoria's Secret? Access our full analysis report here.
What Is The Market Telling Us
Victoria's Secret’s shares are extremely volatile and have had 42 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 2 days ago when the stock gained 3.5% on the news that optimism surged over a potential trade truce between the U.S. and China. Reports of progress in trade negotiations ahead of a scheduled meeting between the two nations' presidents fueled investor confidence. An agreement would likely ease trade tensions and reduce or remove tariffs that have created economic uncertainty and higher costs for many multinational corporations. Also, optimism improved on expectations that the Federal Reserve will cut interest rates later in the week, especially after recent data showed inflation wasn't heating up as much as expected. Simply put, good news on trade, and the promise of lower borrowing costs created a powerful rally.
Victoria's Secret is down 7.8% since the beginning of the year, and at $37.27 per share, it is trading 23.5% 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 $876.94.
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