Victoria's Secret rallies 14% after buybacks, better-than-feared guidance

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Victoria's Secret & Co. (NYSE:VSCO) was one of the biggest gainers in the consumer discretionary sector on Wednesday after narrowing its Q4 guidance and setting a new $250M buyback plan.

Cowen analyst Oliver Chen said the share repurchase program should be positively received by investors and the overall retail environment was better than feared during the holidays.

Bank of America analyst Lorraine Hutchinson noted the stock is down 26% since reporting the last earnings report on November 30, which indicates to the firm that a miss was expected. "Instead, sales and margins are in the guidance range, with inventory trending better. This makes the 7x our 23E P/E look particularly inexpensive for a strong free cash flow generator with brand turnaround opportunity," she noted.

Shares of Victoria's Secret (VSCO) rallied 13.65% on Wednesday to trade at their highest level of the year.