UBS upgrades Victoria’s Secret to 'buy' on growing conviction in management
UBS has upgraded Victoria’s Secret, one of the world’s best-known lingerie retailers, to “buy,” saying the management is capable of restoring sustainable growth after several years of declining sales. The bank’s target price offers 27% upside.
Details
Yesterday, October 29, UBS raised its rating on Victoria’s Secret stock from “neutral” to “buy,” and set a new target price of $46 per share, as reported by Seeking Alpha.
Investors welcomed the call: shares jumped nearly 5% to $36.20 per share yesterday. Even after the rally, UBS’s target still implies 27% upside versus the last close.
UBS's rationale
UBS analyst Mauricio Serna said he has gained conviction in the management’s ability to reposition the company’s key brands, Victoria’s Secret and PINK. That should return the retailer to sustained comparable sales growth after years of declines.
The Wall Street consensus, Serna argues, still underestimates the company’s potential. According to MarketWatch data, Victoria’s Secret has five “hold” ratings, three “buy,” and two “sell.” The average target price of $29 per share remains below current levels. UBS, by contrast, sees a “strong path for the stock” in the near to medium term, TipRanks reports.
The UBS team forecasts a 21% compound annual EPS growth rate through 2029, driven by roughly 3.5% annual sales growth, operating leverage, and free cash flow deployment toward debt repayment and share buybacks.
Recent company developments
Victoria’s Secret went public in 2021, but its performance since then has been weak, with the stock losing about 34% of its value. While the company posted sales growth in 2021, sales subsequently declined.
In 2024, the retailer appointed Hillary Super as CEO to replace Martin Waters. Investors initially hoped her arrival would rejuvenate the business, but her focus on new categories such as activewear and swimwear drew skepticism, the WSJ reported.
In mid-2025, Victoria’s Secret came under simultaneous pressure from two activist investors. Australia’s BBRC International, a shareholder, accused the board of “systematic value destruction,” while Barington Capital Group demanded a board overhaul to refocus on the core bra business.
Despite that turbulence, second-quarter 2025 results showed improvement. Net revenue rose 3% year over year to $1.5 billion, beating the company’s own guidance by about 7%. Comparable sales increased 4%, prompting management to raise its full-year sales outlook to $6.3-6.4 billion, up from the prior $6.2-6.3 billion. In 2024, the figure stood at $6.2 billion, implying growth of between 1.6% and 3.2% this year.
The AI translation of this story was reviewed by a human editor.
