Play The Luxury Market With Small-Cap Stock Victoria's Secret

(MENAFN- Yolo Wire) A growing number of analysts say the U.S. is in K-shaped economy, with most of the spending coming from wealthy consumers. And Victoria's Secret (NYSE: $VSCO) is a small-cap stock that caters to a luxury clientele.

The high-end lingerie retailer has seen its share price rise steadily this year amid a downturn in the broader retail space.

So far in 2025, VSCO stock is up 27% and having one of its best years ever. In the past six months, the share price has rocketed 127% higher, pulling the stock out of a steep loss.

This despite growing economic uncertainty in the U.S. and signs that lower end consumers are pulling back on their spending.

On Dec. 5, Victoria's Secret reported strong financial results that included an earnings per share (EPS) loss of -$0.27 U.S., which was much better than a loss of -$0.59 U.S. expected on Wall Street.

Revenue for the quarter came in at $1.47 billion U.S., ahead of the consensus estimate of $1.41 billion U.S.

Guidance provided by Victoria's Secret was also strong, with management projecting full-year 2026 earnings of $2.40 U.S. to $2.65 U.S. versus the analyst consensus of $2.13 billion U.S.

Revenue for all of 2026 is expected at $6.45 billion U.S. to $6.48 billion U.S., ahead of the analyst consensus of $6.39 billion U.S.

The strong results have led several analysts on Wall Street to raise their outlook on VSCO stock, including Swiss bank UBS (NYSE: $UBS).

Analysts at UBS have lifted their price target on Victoria's Secret stock to $60 U.S. from $46 U.S. and reiterated a buy rating on the shares.

With a market capitalization of $4 billion U.S., Victoria's Secret is a small-cap stock. But it has been rising like a mega-cap technology stock in recent months.

There's no dividend offered to shareholders. But with the company on the cusp of turning profitable and with its sales gathering steam, now could be a good time to invest in VSCO stock.

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