Wells Fargo Reiterates Overweight Rating on Victoria's Secret (VSCO) on 'Good Enough' Results and Accelerated Buyback

Wells Fargo analyst Ike Boruchow reiterated an Overweight rating and $85.00 price target on Victoria's Secret (NYSE: VSCO) after the company announced "good enough" Q4 results and a $250 million accelerated buyback.

The analyst commented, "With investor sentiment on VSCO remaining very low coming out of holiday (expectations for a choppy holiday/potential miss), this morning the company announced 1) 4Q sales/EPS inline with prior plan and 2) a $250MM ASR (5-7% of the market cap or $0.25-$0.30 accretive to next FY). The company called out encouraging, broad-based sales growth during peak shopping days during Thanksgiving week as well as the buildup to December 25th. In addition, inventories are well positioned headed into January's semi-annual sale (and starting to lap LY's stimulus impact). With VSCO's semi-annual sale slated for January (and a very difficult compare from LY ahead, we estimate comps +15-20% in Jan 2021), the next 30 days of selling are still important for the name. That said, this is a clear positive event on one of the cheapest names under coverage."

For an analyst ratings summary and ratings history on Victoria's Secret click here. For more ratings news on Victoria's Secret click here.

Shares of Victoria's Secret closed at $48.58 yesterday.

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