Maryland Retirement System Cuts Stake in Victoria’s Secret by 51%

The Maryland State Retirement & Pension System has significantly reduced its investment in Victoria’s Secret & Co. (NYSE: VSCO), cutting its stake by 51.1% during the third quarter of 2023. According to filings with the U.S. Securities and Exchange Commission (SEC), the retirement system owned 11,480 shares after selling 11,983 shares throughout the quarter, bringing the total value of its holdings to approximately $312,000.

This decision reflects a broader trend among institutional investors, many of whom have either increased or decreased their stakes in the company. Notably, Universal Beteiligungs und Servicegesellschaft mbH entered a new position in Victoria’s Secret valued at around $200,000 in the second quarter. Meanwhile, Vestmark Advisory Solutions Inc. substantially increased its stake by 219.3%, owning 55,542 shares worth about $1,029,000 following an additional purchase of 38,149 shares.

The Bank of Montreal also raised its holdings in the company by 45.9%, now owning 28,266 shares valued at $523,000. Additionally, Quadrature Capital Ltd acquired a new position estimated at approximately $710,000, while the State of Alaska Department of Revenue increased its stake by 9.2%, bringing its total to 47,585 shares valued at $880,000. Collectively, hedge funds and institutional investors now control 90.29% of Victoria’s Secret’s stock.

Analysts Issue New Price Targets for Victoria’s Secret

Several brokerages have recently adjusted their price targets for Victoria’s Secret following its financial disclosures. Jefferies Financial Group raised its target price from $57.00 to $65.00, while UBS Group increased its target from $60.00 to $73.00, both assigning a “buy” rating. Zacks Research upgraded the stock from a “hold” to a “strong buy” rating, and TD Cowen maintained a “hold” rating.

Overall, analysts have shown a positive outlook for Victoria’s Secret, with one equity research analyst rating it as a Strong Buy, seven giving it a Buy rating, five issuing Hold ratings, and one analyst recommending a Sell. According to MarketBeat, the company has a consensus rating of “Moderate Buy” and an average target price of $54.60.

Performance and Recent Earnings Results

Victoria’s Secret’s stock opened at $59.73 on Friday. Over the past year, the stock has fluctuated between a low of $13.76 and a high of $66.89. The company reported a current ratio of 1.30, a quick ratio of 0.38, and a debt-to-equity ratio of 1.96. With a market capitalization of $4.79 billion, the company has a price-to-earnings (P/E) ratio of 29.13 and a price-to-earnings-growth (PEG) ratio of 2.45.

In its latest quarterly earnings report, released on December 5, 2023, Victoria’s Secret reported an earnings per share (EPS) of ($0.27), surpassing the consensus estimate of ($0.60) by $0.33. The company generated revenue of $1.47 billion, exceeding the expected $1.41 billion. Victoria’s Secret achieved a net margin of 2.67% and a return on equity of 33.47%, marking a 9.2% increase in revenue compared to the same quarter the previous year.

Looking ahead, Victoria’s Secret has projected its fiscal year 2025 guidance for EPS between $2.400 and $2.650, with a fourth quarter guidance of $2.200 to $2.450. Analysts anticipate that the company will achieve an EPS of 2.37 for the current fiscal year.

Founded in 1977 by Roy and Gaye Raymond, Victoria’s Secret & Co. is a prominent designer, manufacturer, and marketer of women’s intimate apparel, beauty products, and accessories. The company operates several brands, including Victoria’s Secret, renowned for its lingerie and sleepwear, and PINK, which targets younger consumers with activewear and lifestyle products.

As the landscape of institutional investment continues to evolve, Victoria’s Secret remains a focal point for both analysts and investors in the retail sector.