Victoria's Secret Analyst Sticks To 'Market Perform' Rating Citing Competitive Marketplace - Victoria's Secret (NYSE:VSCO)

Telsey Advisory Group analyst reiterated a Market Perform rating on the shares of Victoria's Secret & Co VSCO with a price target of $45.00.
VSCO updated its fourth-quarter earnings guidance, raising its outlook, while announcing a $125 million accelerated share repurchase program (ASR.
On the topline, VSCO now looks for sales to decline 7%-8%, a slight improvement from the down high-single digit outlook provided previously, the analyst noted.
The analyst added that margins are expected to align with the company's prior expectations, reflecting a very promotional holiday period with stronger SG&A control.
VSCO is controlling what it can in this challenging macro environment and, when adjusted for modal shifts (higher in-transit) expects to end FY22 with inventory levels down low double digits Y/Y, said the analyst.
The company noted that the economic environment heading into FY23 is "not ideal" and may result in a year similar to FY22.
Despite the challenging macro operating environment, VSCO has identified and executed against numerous long-term drivers of growth, said the analyst.
In addition to VSCO's clear market leadership position within intimates, these longer-term growth initiatives, combined with its financial stability and cash flow potential, are key competitive advantages for the company, the analyst specified.
Price Action: VSCO shares are trading higher by 7.22% at $45.19 on the last check Wednesday.