TD Cowen lowered its price target on Victoria’s Secret & Co. (NYSE: VSCO) to $58 from $60 while maintaining a Hold rating.
The firm said the stock’s recent weakness reflected high expectations following strong recent performance, more modest margin expansion in company guidance, and tougher year-over-year comparisons expected in the second half of fiscal 2026.
Although the firm maintained a cautious stance entering the earnings release due to valuation and a challenging setup, the analyst acknowledged that management execution has been strong and that Victoria’s Secret may still be in the early to middle stages of a turnaround.
TD Cowen said it was encouraged by improving engagement among younger customers, particularly within the PINK brand, which supports long-term growth prospects. Average unit retail prices increased by a mid-single-digit percentage as promotional activity declined and full-price selling improved, with all categories performing well during the fourth quarter of fiscal 2025.
Quarter-to-date trends also suggested continued momentum across both brand banners, supported by new product launches around Valentine’s Day.
However, the firm warned that tougher comparisons in the second half of the year — following 8% comparable sales growth during the same period last year — along with limited margin expansion in the first quarter due to tariffs and higher SG&A investment, contributed to the cautious outlook.
TD Cowen maintained its Hold rating, noting that the stock’s strong performance may limit upside potential, although continued operational execution could still drive higher earnings. The revised $58 price target is based on approximately 15 times projected fiscal 2027 earnings per share.
