Bank of America upgrades Victoria's Secret to Buy on strong sales and margin growth prospects

Bank of America upgraded Victoria's Secret from Neutral to Buy, citing expectations for continued sales momentum and margin expansion that could drive mid- to high-teens earnings growth. The bank raised its price target to $68 from $58, highlighting the company's repositioning efforts, product innovation, and marketing investments as key growth drivers. Operating margin expansion is expected from better buying leverage, fewer promotions, higher full-price sales, and cost efficiencies, with margins projected to reach about 8%. The upgrade reflects confidence in durable growth, especially in beauty and international markets, supporting a premium valuation relative to apparel peers.