Bath & Body Works (BBWI): Evaluating the Company’s Valuation Following New Leadership Appointments

Bath & Body Works (BBWI) has shaken up its leadership ranks, announcing the appointments of Maly Bernstein as Chief Commercial Officer and Samantha Charleston as Chief Human Resources Officer, both starting November 12. Investors are watching how this shift might support the company’s ongoing transformation and future growth strategies.

See our latest analysis for Bath & Body Works.

While leadership changes are making headlines, Bath & Body Works' 1-year total shareholder return still sits at -21.63%. This reflects cooling investor momentum as the company works through its transformation. The recent 1-day share price bounce of 1.1% stands in contrast to a tough year-to-date run, with shares down nearly 40% as investors weigh near-term challenges against the long-term upside.

If you’re exploring new opportunities as leadership stories unfold, broaden your search and discover fast growing stocks with high insider ownership.

The recent shake-up at the top comes as Bath & Body Works trades at a notable discount to analyst targets. This raises the question: has the market overlooked a potential rebound, or is future growth already priced in?

Most Popular Narrative: 43.8% Undervalued

According to the most-followed narrative by user Zwfis, Bath & Body Works’ fair value sits far above the recent close, highlighting a significant disconnect between market price and projected growth. The story behind this valuation is shaped by the complexity of its post-spin-off structure, current debt burden, and ambitious plans for market expansion.

However, a big reason the company's numbers are not as good as they should be is because of how much debt they took on from the split off from Victoria's Secret. I ran a projection based on equity per share if we were able to take away some of the debt from that split. In doing so, it left their shareholder equity at $10 per share. I felt like this was definitely too high, so I only used it to project a rough rate of return on equity. In doing so, I was able to come up with an annual return of 37.5%. Then, if we take out the dividend aspect, we are left with a return of 29.625%.

Read the complete narrative.

Curious how this narrative justifies such a big upside? The fair value leans on key growth assumptions that could turn heads if BBWI addresses its debt and succeeds in expansion. There is a pivotal financial lever embedded in the outlook. Want to see what is driving that calculation? Dive in for the full story.

Result: Fair Value of $40.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent debt pressures and uncertainty around successful international expansion remain critical risks that could derail the anticipated turnaround for Bath & Body Works.

Find out about the key risks to this Bath & Body Works narrative.

Build Your Own Bath & Body Works Narrative

If you see the story differently or want to dig into the numbers yourself, you can quickly put together your own view in just a few minutes. Do it your way.

A great starting point for your Bath & Body Works research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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