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Bath & Body Works, Inc. (BBWI) is a specialty retailer based in Ohio primarily known for its exclusive fragrances. With a market cap of $7.5 billion, its product range includes body and home fragrances, fragrance mists, body lotions, body creams, 3-wick candles, home fragrance diffusers, and liquid hand soap.
Bath & Body Works has significantly lagged behind the broader market over the last year. The stock has declined 10.1% over this time frame, while the broader S&P 500 Index ($SPX) has rallied 26.1%. In 2024 alone, BBWI stock is down 21.9%, trailing SPX’s 16.5% rise on a YTD basis.
On a closer look, BBWI has also underperformed the SPDR S&P Retail ETF (XRT), which has surged 18.9% over the past 52 weeks.
Bath & Body Works’ declining price momentum is driven by persistent inflation and high interest rates, which have undermined consumer confidence in spending on the discretionary items the company offers.
Moreover, shares of BBWI fell 10.7% on June 4 after the company released its Q1 earnings report. BBWI exceeded analysts' Q1 earnings estimates, but its lower-than-expected earnings forecasts for the next quarter and full year upset the investors.
For the current fiscal year, ending in January 2025, analysts expect BBWI I’s EPS to grow marginally year over year to $3.30 on a diluted basis. The company's earnings surprise history is robust. It beat the consensus estimate in each of the last four quarters.
Among the 18 analysts covering Bath & Body Works stock, the overall consensus rating is a “Moderate Buy.” That’s based on seven “Strong Buy” ratings, two “Moderate Buys,” and nine “Holds.”
This configuration has been consistent over the past months.
On July 24, Wells Fargo & Company (WFC) analyst Ike Boruchow reduced Bath & Body Works' price target from $48 to $40 and maintained an “Equal-Weight” rating. The firm is cautious about WFC's Q2 EPS and has lowered its Q2 and second-half estimates, indicating ongoing struggles.
The mean price target of $49.59 represents a 47.1% premium from BBWI’s current price levels. The Street-high price target of $60 suggests an impressive upside potential of 78%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
