Analysts Cite Mixed Outlook for Bath & Body Works as Price Target Edges Lower

The analyst price target for Bath & Body Works was revised slightly downward from $39.33 to $38.83. Analysts cited continued heavy promotions, mixed results from product launches, and ongoing macroeconomic challenges that are limiting near-term sales and margin improvements.

Analyst Commentary

Recent analyst reports highlight a mix of optimism and caution regarding Bath & Body Works' near-term performance and longer-term prospects. Below are the main bullish and bearish takeaways shaping their outlook.

• Certain analysts have raised their price targets following the company's fiscal Q2 results, pointing to resilience amid ongoing macroeconomic pressures.
• Expectations remain that tariff-related cost impacts, though notable in the short term, are largely contained and anticipated in the stock price.
• Some believe the company's strong brand, product assortment, and execution of new initiatives position it for potential margin and sales improvement over time.

• Several analysts have lowered their price targets, citing persistent heavy promotional activity both online and in stores, which weighs on margins and profit growth.
• There is concern that new product launches are not delivering sustained performance, with new items quickly discounted as competitive pressure continues.
• Ongoing macroeconomic uncertainty, including consumer pressure and inventory flows, is limiting confidence in near-term sales acceleration.
• Analysts are cautious about meaningful upside until the company demonstrates consistent execution on reducing promotions and improving full-priced sell-through.

What's in the News

• Bath & Body Works completed the repurchase of 8,006,891 shares, representing 3.74% of outstanding shares, for a total of $238.71 million as part of its ongoing buyback program. (Key Developments)
• The company narrowed its full-year 2025 net sales growth guidance to a range of 1.5% to 2.7% and now expects earnings per diluted share for 2025 to be between $3.28 and $3.53. Third quarter 2025 guidance sees net sales up 1% to 3% and EPS between $0.37 and $0.45. (Key Developments)
• Bath & Body Works launched The Disney Villains Collection, a new fragrance line inspired by iconic Disney characters Maleficent and the Evil Queen, with a 39-product assortment available internationally. Early access for loyalty members started August 26 to 27, with the full launch on September 3, 2025. (Key Developments)
• The brand expanded distribution to over 600 college campus stores nationwide, offering its most popular fragrances among Gen Z and further strengthening its position as the No. 1 fragrance brand among American teens. (Key Developments)

Valuation Changes

• Consensus Analyst Price Target: Decreased modestly from $39.33 to $38.83.
• Discount Rate: Edged lower from 10.66% to 10.63%, which suggests a slight reduction in perceived risk.
• Revenue Growth: Remained virtually unchanged and held steady at approximately 3.00%.
• Net Profit Margin: Unchanged at 10.40%, indicating stable profit expectations.
• Future P/E: Reduced slightly from 11.27x to 11.11x and reflects a minor adjustment in valuation outlook.