Analysts have modestly reduced their price targets for Bath & Body Works, with updated estimates reflecting a decrease of approximately $1. They now cite ongoing promotional activity and macroeconomic uncertainty as factors limiting near-term upside.
Analyst Commentary
Recent analyst reports present a balanced picture for Bath & Body Works, with both positive developments and areas of concern noted by the Street.
Bullish Takeaways- Some bullish analysts have raised their price targets, citing expectations of stabilizing performance following the latest quarterly results.
- Inventory flow-through from tariff impacts is expected to be largest in the coming quarter. This could offer greater clarity on future cost structures and profitability.
- Despite ongoing challenges, the company maintains generally positive ratings from a subset of analysts. They see potential for share price recovery if macroeconomic headwinds ease.
- Bearish analysts point out continued heavy promotional activity. This is limiting margin expansion and potentially eroding brand equity.
- The company's recent product launches, including collaborations, have shown uneven impacts. New items have been quickly discounted despite stated goals of reducing reliance on sales promotions.
- Macroeconomic uncertainty and persistent pricing pressures continue to weigh on the near-term sales and operating leverage outlook.
- Several analysts have reduced their price targets. This reflects concerns about the pace of execution and overall sales momentum in light of ongoing market challenges.
What's in the News
- Bath & Body Works revised its full-year 2025 net sales guidance, now expecting growth between 1.5% and 2.7% compared to $7,307 million in fiscal 2024. For the third quarter of 2025, sales are projected to rise 1% to 3%, but earnings per share are anticipated to be lower than the previous year. (Company Guidance)
- The company completed a significant share repurchase program, buying back over 8 million shares, or 3.74% of its outstanding stock, for a total of $238.71 million as part of a buyback announced earlier in 2025. (Buyback Update)
- Bath & Body Works introduced The Disney Villains Collection, inspired by iconic characters Maleficent and the Evil Queen, with fragrances and products offered both domestically and internationally starting September 3, 2025. Loyalty members have exclusive early access beginning August 26. (Product Announcement)
Valuation Changes
- Fair Value Estimate has declined modestly, decreasing from $38.83 to $37.77 per share.
- Discount Rate has risen slightly, moving from 10.63% to 10.70%.
- Revenue Growth expectations edged lower, from 3.00% to 2.95% annually.
- Net Profit Margin is nearly unchanged, ticking up marginally from 10.40% to 10.41%.
- Future P/E Ratio forecast has fallen. It is now at 10.83x compared to the previous estimate of 11.11x.
Disclaimer
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