UBS cuts Victoria’s Secret to Sell, sees earnings outlook deteriorate in 2023

UBS analyst Jay Sole downgraded Victoria’s Secret to Sell from Neutral with a price target of $27, down from $43, as part of a broader research note into U.S. Softlines Retail. The analyst warns that the market is underestimating the pressure that industry sales face from the expected recession while overestimating the margin benefits from the easing supply chain constraints. Retail industry earnings outlook will deteriorate throughout the year, leading to "persistent" downward revisions in earnings and pressure on Softline price-to-earnings multiples, Sole tells investors in a research note.