Morgan Stanley Sees Limited Upside for Victoria's Secret (VSCO) Despite Turnaround Efforts

Victoria’s Secret & Co. (NYSE:VSCO) is one of the best stocks for day trading. On August 28, Morgan Stanley’s Alexandra Straton reiterated a Hold rating on Victoria’s Secret (NYSE:VSCO) with a $20 price target.

The analyst acknowledged progress in the company’s turnaround, noting that Q2 results topped expectations for EPS, sales, and gross margin. She believes that stronger store traffic, improved full-price selling, and fewer promotions suggest that recent strategic initiatives are beginning to gain traction.

Even so, Straton remains cautious. EBIT margins remain below historical averages, and management’s Q3 guidance was softer than expected, indicating challenges from tariff pressures, increased marketing expenses, and rising labor costs.

With macro uncertainty lingering and the turnaround still in its early stages, the analyst sees limited visibility on earnings growth sustainability, which supports the decision to remain on Hold.

Victoria’s Secret & Co. (NYSE:VSCO) is a specialty retailer of women’s intimate and other apparel and beauty products marketed under the Victoria’s Secret, PINK, and Adore Me brand names.

While we acknowledge the potential of VSCO as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 15 Best Multibagger Stocks to Invest in Right Now and 10 Best High Beta Stocks To Buy Now.

Disclosure: None. This article is originally published at Insider Monkey.