Victoria’s Secret double downgraded to Underperform at BofA

As previously reported, BofA analyst Alice Xiao double downgraded Victoria’s Secret to Underperform from Buy with a price target of $15, down from $34, based on the steep slowdown in sales trends and continued secular slowdown in the core lingerie market that led the company to issue weaker-than-expected FY24 guidance. The firm lowered its FY25 and FY25 EPS estimates by 35% and 43%, respectively, given challenged sales trends and higher-than-expected selling, general and administrative expenses and thinks a lower multiple is justified given the sales struggles and the firm’s expectation for lower margins.