Wells Fargo Upgrades Victoria's Secret (VSCO) to Equal Weight

Wells Fargo analyst Ike Boruchow upgraded Victoria's Secret (NYSE: VSCO) from Underweight to Equal Weight with a price target of $45.00 (from $36.00).

The analyst comments "#1: Product and Marketing Enhancements Paying Off. VSCO's latest couple of prints have shown that new management is beginning to make a real impact on the business, with intimates inflecting and renewed marketing efforts - including the revamped Victoria's Secret Fashion Show - bearing fruit. As marketing enhancements and product innovation (particularly bra launches) continue to resonate with the consumer, VSCO's market share is showing signs of stabilization with intimates gaining 1% in the US market - and we see their current momentum continuing into 2026, with management recently highlighting they only see the VS brand as a third to halfway through improvements (the furthest along of VS, PINK, and beauty) with a healthy pipeline of innovation and newness coming. #2: PINK Working Again. Following several years of underperformance, VSCO finally has PINK sustainably rebounding, with notable recent AUR gains as the brand sees significant and successful fashion and now intimates innovation for the first time in years. PINK intimates also returned to growth for the first time in years (following robust growth in apparel this year), and social media brand heat trends have been accelerating as marketing efforts such as PINK Wednesday drops and the Fashion Show's PINK segment have gone viral. All in, PINK's resurgence suggests a younger generation is beginning to shop VSCO again, and the brand remains an important pipeline into the main VS brand. #3: VSCO Another Potential Big Winner on Tariffs. Similar to GAP (mentioned above), VSCO also carries a low-margin profile in the MSD's, and we estimate ~250bps of margin is being removed by elevated tariff levels go-forward - which positions VSCO to be a key winner within retail if they are then repealed. In addition to the inflection in top-line in the business at both VS and PINK, we credit VSCO's recent margin improvements, with OM (excl. tariffs) expanding for the first time in 12+ months in their latest print, driven by reduced promos, selective price-taking, and leverage. Go- forward we see additional levers to pull on AUR, promotionality, and cost savings - and see momentum into 2026."

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 $54.76 yesterday.

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