VSCO Should I Buy
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Victoria's Secret & Co (VSCO) is not a good buy for a beginner, long-term investor at this time. Despite some positive analyst ratings and price target increases, the company's recent financial performance, negative news sentiment, and technical indicators suggest caution. The stock is under pressure from declining net income, an asset impairment loss, and securities fraud investigations. Additionally, there are no strong trading signals or significant positive catalysts to justify a buy recommendation.
The MACD histogram is negative (-1.851), indicating bearish momentum. RSI is at 22.03, suggesting the stock is oversold but not signaling a clear reversal. Moving averages are converging, showing indecision in price trends. The stock is trading near its S1 support level of 45.537, with resistance levels far above at 53.403 and 61.268.
Analysts from JPMorgan, UBS, and Barclays have raised price targets, citing improving brand momentum and successful repositioning of the Victoria's Secret and PINK brands. Gross margin increased by 5.01% YoY in Q3 2026.
The company is under investigation for securities fraud, reported a $116.9 million asset impairment loss, and initiated a strategic review of non-core assets. Net income dropped by 33.93% YoY, and EPS declined by 35.21% YoY. The stock price has dropped 22.13% over two trading sessions following these developments.
In Q3 2026, revenue increased by 9.28% YoY to $1.472 billion, but net income dropped to -$37 million (-33.93% YoY), and EPS fell to -0.46 (-35.21% YoY). Gross margin improved to 36.48%, up 5.01% YoY.
Analysts are mixed but leaning positive. JPMorgan, UBS, and Barclays maintain Overweight or Buy ratings with price targets ranging from $67 to $81. However, TD Cowen and BofA maintain Hold or Neutral ratings, citing concerns over near-term margin pressures. Jefferies and Barclays recommend buying on weakness.
