Earnings Estimates Moving Higher for Victoria's Secret (VSCO): Is It Time to Buy?

Investors might find Victoria's Secret (VSCO) to be an appealing option as recent trends indicate improvements in earnings estimates for the company. After gaining momentum in the stock market, there are indications that this positive trend may continue, fueled by a favorable earnings outlook.

The increase in estimated earnings reflects a growing sense of confidence among analysts regarding Victoria's Secret's future performance. It is well-documented that changes in earnings estimates often correlate with subsequent movements in stock prices. This insight is central to a popular tool known as the Zacks Rank.

The Zacks Rank employs a five-grade system that ranges from #1 (Strong Buy) to #5 (Strong Sell). Historically, stocks ranked as Zacks #1 have achieved an impressive average annual return of +25% since 2008, showcasing the potential value of following this rating method.

Current-Quarter Estimate Revisions

For the current quarter, the earnings estimate for Victoria's Secret stands at $2.20 per share. This figure marks a decline of -14.73% compared to the same period last year.

However, it is noteworthy that the Zacks Consensus Estimate for the upcoming quarter has risen by 6.12% over the past 30 days, with four new estimates reflecting this positive outlook and no revisions indicating a decline.

Current-Year Estimate Revisions

For the entire fiscal year, the earnings estimate is currently set at $2.24 per share, which represents a decrease of -1.32% from the previous year's figures.

The trend for this year's estimates also appears encouraging. In the past month, five estimates have been revised upward, while only one has declined, contributing to a substantial increase of 14.19% in the consensus estimate.

Favorable Zacks Rank

Due to these promising estimate revisions, Victoria's Secret currently holds a Zacks Rank of #2 (Buy). The Zacks Rank has a proven track record, helping investors leverage earnings estimate revisions to make informed decisions. Stocks ranked #1 and #2 tend to outperform the broader S&P 500 index.

Bottom Line

With a noticeable increase in stock value—up by 30.3% over the last four weeks—investors are showing strong interest in Victoria's Secret. Given the positive trajectory of the company's earnings growth prospects, it may be worth considering adding this stock to your investment portfolio.

Victoria's, Secret, VSCO