It’s been a while since clothing legend Victoria’s Secret (NYSE:VSCO) saw much good news. However, it broke open a huge vein of the stuff today to close up over 12% in Wednesday’s trading. The company rolled out fourth-quarter guidance, tightening the EPS figures down to between $2.05 per share and $2.25 a share. That’s a much closer range than the previous one, which looked for VSCO’s earnings to come in between $2 a share and $2.45 per share.
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Victoria’s Secret revealed that some “significant weather challenges” did slow down spending. At least on Christmas Eve and the day before, thanks to that massive storm that turned driving into a treacherous death trap. Nevertheless, the sales before that weather nightmare were sufficiently positive to give Victoria’s Secret a leg up.
Better yet, an aggressive $250 million stock buyback plan gave Victoria’s Secret a hand. That’s sufficient, says Cowen analyst Oliver Chen, to make investors sit up and take notice. Victoria’s Secret has experienced no shortage of rough times lately; the decline of mall shopping in favor of online, leadership changes, and even some internal cultural changes that turned the company away from some kinds of models in favor of other kinds. These latest moves should, in turn, help prove its overall longevity.
Wall Street is skeptical, but only somewhat. Currently, analyst consensus calls VSCO stock a Hold with an average price target of $44.86. This implies 16.55% upside potential.
