Section 1: Company Overview and Fundamentals

1.1 Company Overview:

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. It offers a range of products across intimate apparel, sleepwear, loungewear, swimwear, and beauty.

Kalkine’s Diversified Opportunities Report covers the Company Overview, Key positives & negatives, Investment summary, Key investment metrics, Top 10 shareholding, Business updates and insights into company recent financial results, Key Risks & Outlook, Price performance and technical summary, Target Price, and Recommendation on the stock.

Stock Performance:

• The stock has corrected by 26.89% in the last month as well as by 53.89% in past six months.
• The stock is currently on the lower end of its 52-week range of USD 48.13 and 52-week low price of USD 17.39. Following the release of Q1FY24 results, the stock corrected by around 9.79%. Currently, the price is near an important support levels of USD 17.00-USD 18.00, and the price is expected to sustain these levels, therefore, there is an expectations of an upward movement.
• The price is currently trading below its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 34.39.        

1.2 The Key Positives, Negatives, and Investment summary

1.3 Key Metrics:

VSCO has demonstrated a consistent financial performance by maintaining stable revenues and gross profit over the past five years. This indicates that the company has been successful in effectively managing its operations and generating steady income. Furthermore, VSCO has shown effective cost control measures, as evidenced by consistently high gross profitability margins of over 30% during the five-year period, except for the years 2020 and 2021. The decline in profitability during those years can be attributed to the impact of the COVID-19 outbreak, which had a widespread negative effect on various industries and businesses. Despite the temporary setback caused by the pandemic, VSCO's track record suggests that it has generally been successful in managing its costs and maintaining strong profitability.

1.4 Top 10 shareholders:

The top 10 shareholders together form ~64.78% of the total shareholding, signifying concentrated shareholding. Fidelity Management & Research Company LLC, and The Vanguard Group, Inc. are the biggest shareholders, holding the maximum stake in the company at ~12.75% and ~10.19%, respectively.

Section 2: Business Updates and Corporate Business Highlights

2.1 Recent Updates:

The below picture gives an overview of the recent updates:

2.2 Insights of Q1FY24:

Section 3: Key Risks & Outlook

Section 4: Stock Recommendation Summary:

4.1 Price Performance and Technical Summary:

Stock Performance:

• The stock has corrected by 26.89% in the last month as well as by 53.89% in past six months.
• The stock is currently on the lower end of its 52-week range of USD 48.13 and 52-week low price of USD 17.39. Following the release of Q1FY24 results, the stock corrected by around 9.79%. Currently, the price is near an important support levels of USD 17.00-USD 18.00, and the price is expected to sustain these levels, therefore, there is an expectations of an upward movement.
• The price is currently trading below its long-term (200-day) SMA and its short-term (50-day) SMA , with the current RSI of 34.39.

4.2 Fundamental Valuation

Valuation Methodology: Price/Cash Flow per share Multiple Based Relative Valuation

Markets are trading in a highly volatile zone currently due to certain macroeconomic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is June 20, 2023. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: The report publishing date is as per the Pacific Time Zone.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

 Stop-loss: It is a level to protect against further losses in case of unfavorable movement in the stock prices.