Buyback Plan, Strong Sales Lift Victoria's Secret Stock

Call traders are targeting VSCO amid the surge

Assistant Editor
Dec 29, 2021 at 11:25 AM
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The shares of Victoria's Secret & Co (NYSE:VSCO) are up 10.9% to trade at $53.89 at last check, after the lingerie name announced a $250 million share repurchase plan. The company also reiterated its fiscal fourth-quarter sales forecast, and boasted strong holiday sales. 

Recently split from L Brands (LB) as a stand-alone company, the newly traded stock has had a volatile run on the charts since its initial public offering (IPO) in July. Today's pop has VSCO breaking above several moving averages, including the 60-day trendline, which may serve as support alongside the familiar $52 level. 

Call traders have been quick to chime in on Victoria's Secret stock today, with call volume running at 11 times what's typically seen at this point. The January 2022 55-strike call is by far the most popular, with new positions being opened there. 

Meanwhile, analysts are overwhelmingly bullish towards the stock, with eight of the nine in coverage sporting a "strong buy" rating. What's more, the 12-month consensus price target of $82.73 is a 53.6% premium to current levels. 

It's also worth noting that short interest represents 5.7% of the stock's available float. It would take nearly four days to buy back these bearish bets, at VSCO's average pace of daily trading. 

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