Needham initiates Victoria’s Secret stock with buy rating, $106 target

Needham has initiated coverage on Victoria’s Secret & Co. (NYSE:VSXY) with a buy rating and a $106 price target, identifying the company as being in the early stages of a multi-year turnaround. The firm anticipates improvements in management, product assortment, and marketing will drive growth, projecting earnings per share to double in the next five years.

With a PEG ratio of 0.14, the stock appears to offer attractive growth potential relative to its valuation. Victoria’s Secret has been among the top-performing specialty retailers in the first half of the year, with momentum continuing into the third quarter. The company is expected to benefit from increased adoption of GLP-1 weight loss medicines as consumers seek new clothing.

Despite a stronger-than-expected second-quarter profit, revenue slightly missed expectations, but the company raised its full-year outlook due to continued momentum in core product categories. Other firms have also taken stances on Victoria’s Secret, with BMO Capital assigning a Market Perform rating and a $80 price target, while UBS set a Neutral rating at $87.

JPMorgan and BofA Securities have provided more optimistic outlooks with Overweight and Buy ratings, respectively, indicating positive trends in revenue growth.