2024-03-11 11:02:21 ET
Summary
- Victoria's Secret shares have plummeted nearly 60% since November 2022 when we last sell-rated the stock.
- The company's quarter was decent, but the forward guidance caused the stock to collapse, and we see it settling out in the mid-teens.
- While there are opportunities for international growth, operational expenses and sales weakness in North America are weighing.
In November 2022, we slapped a sell rating on Victoria's Secret & Co. ( VSCO ). Shares have never recovered are down nearly 60% since that call. Now, we will point out that shares had been on a tear from the mid-teens to about $30 before dumping off after the just-reported Q4 2023 earnings . You know what is interesting about this collapse in shares is that the quarter was actually decent. In fact, sales were in line with expectations, while EPS was a beat against consensus estimates . The problem really stemmed from the forward guidance, and in this column we will discuss the results, and the outlook. This was a bit of a 'kitchen sink' type guidance that sent shares back to the mid-teens level. At this point, there is value in the stock here, but we do expect relative underperformance over the next few weeks. However, at this juncture we are lifting our sell and moving to neutral....
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Victoria's Secret Stock Craters 35% In A Week - Upgrading From A Sell