TD Cowen Lowers Victoria’s Secret Price Target While Maintaining Hold Rating

Core Viewpoint - TD Cowen has lowered its price target for Victoria's Secret & Co. to $58 from $60 while maintaining a Hold rating, citing recent stock weakness due to high expectations and modest margin expansion guidance [1] Group 1: Financial Performance and Outlook - The firm noted that management execution has been strong, indicating that Victoria's Secret may be in the early to middle stages of a turnaround [2] - Average unit retail prices increased by a mid-single-digit percentage as promotional activity declined, with all categories performing well during the fourth quarter of fiscal 2025 [3] - Quarter-to-date trends suggested continued momentum across both brand banners, supported by new product launches around Valentine's Day [4] Group 2: Challenges and Risks - The firm warned of tougher year-over-year comparisons in the second half of the year, following an 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 [4] - The revised price target of $58 is based on approximately 15 times projected fiscal 2027 earnings per share, reflecting a cautious outlook due to the stock's strong performance potentially limiting upside [5]