Victoria's Secret & Co. (NYSE:VSCO) could continue delivering strong earnings growth as sustained sales momentum supports margin expansion, according to Bank of America, which maintained its ‘Buy’ rating on the retailer.
Bank of America analysts wrote that recent sales trends have eased concerns about a potential slowdown following the company's first-quarter earnings beat and increased full-year guidance.
The analysts expect continued momentum to drive operating margin expansion and mid- to high-teens earnings-per-share growth over the next several years.
The firm said it believes Victoria's Secret can achieve a 10% EBIT margin by fiscal 2028 through expense leverage and a greater mix of full-price sales.
Bank of America's updated sensitivity analysis indicated that 8% total sales growth and a 10% operating margin in fiscal 2027 would produce earnings per share about 15% above its base-case forecast, which assumes 6% sales growth and a 9% operating margin.
The analysts also highlighted store productivity initiatives as a longer-term opportunity to improve profitability. Victoria's Secret has been remodeling stores under its "Store of the Future" concept, with remodeled locations generating double-digit sales increases despite operating with smaller footprints. Management aims to remodel half of its global store base by the end of fiscal 2027, leaving additional room for productivity gains beyond that period.
Bank of America maintained its $95 price target on the shares, citing expectations for several years of mid- to high-teens earnings growth driven by operating margin expansion.
Shares traded hands at about $80 on Wednesday afternoon, up about 48% so far in 2026.