Victoria's Secret (VSCO): Revisiting Valuation After Telsey Advisory’s Outperform Upgrade and Turnaround Momentum

Telsey Advisory’s upgrade on Victoria's Secret (VSCO) to Outperform, tied to better momentum with younger shoppers and beauty, has come right as the stock is riding a steep multi month rally.

See our latest analysis for Victoria's Secret.

That call from Telsey lands after a sharp reset in expectations, with Victoria's Secret delivering a roughly 120 percent 3 month share price return and a 34 percent one year total shareholder return, suggesting momentum is firmly rebuilding around the turnaround story.

If this rebound has you rethinking where retail and consumer trends are heading next, it could be a good moment to explore fast growing stocks with high insider ownership.

Yet with shares now hovering near analyst targets but still trading at a sizeable discount to some intrinsic value estimates, the key question is whether Victoria's Secret remains a buyable turnaround or if the market is already pricing in the next leg of growth.

Most Popular Narrative Narrative: 81.7% Overvalued

Compared with the last close of $56.70, the most followed narrative points to a much lower fair value, framing today’s price as punchy.

Analysts are assuming Victoria's Secret's revenue will grow by 2.2% annually over the next 3 years. Analysts assume that profit margins will shrink from 2.4% today to 2.2% in 3 years time.

Read the complete narrative.

Curious how modest growth, thinner margins, and a richer future earnings multiple can still justify a far lower fair value than today’s price? The full narrative unpacks the math.

Result: Fair Value of $31.20 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent tariff headwinds and continued reliance on mall based stores could still derail the turnaround if traffic or pricing power weakens.

Find out about the key risks to this Victoria's Secret narrative.

Another Take on Value

Our DCF model actually points the other way, suggesting Victoria's Secret is worth about $78.87 per share, roughly 28 percent above the current price. If cash flows play out closer to this script than to consensus, short term volatility could be masking a longer term opportunity.

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Victoria's Secret for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 898 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Victoria's Secret Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a custom view in just minutes: Do it your way.

A great starting point for your Victoria's Secret research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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