03:12 PM EDT, 06/12/2025 (MT Newswires) -- Victoria's Secret (VSCO) remains a potential turnaround stock after Q1 results showed signs management's initiatives to reignite growth are bearing fruit, UBS said in a note emailed Thursday.

The lingerie and beauty retailer on Wednesday reported fiscal Q1 earnings that came ahead of expectations. Adjusted diluted earnings of $0.09 per share on sales of $1.35 billion were above the FactSet consensus of $0.04 on revenue of $1.33 billion.

"We think the company is on the right path to stabilize its market share in core North America intimates and drive growth in adjacent categories," UBS said in its note.

However, the company's fiscal 2025 EPS guidedown and "weak" Q2 outlook mean tariffs could slow the turnaround, the firm said.

UBS said it was now forecasting a 4% EPS compound annual growth rate over a six-year period.

The firm also lowered its fiscal 2025 earnings estimate by 5% but said it was maintaining its fiscal 2026 and 2027 forecasts.

UBS reiterated its neutral rating on the stock with a $24 price target.

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