Bath & Body Works (BBWI): Valuation Check as Candle Day and Holiday Promotions Drive Seasonal Sales

Bath & Body Works (BBWI) has flipped the switch on its flagship Candle Day event, rolling out steeply discounted three wick candles, limited edition scents and splashy holiday campaigns that could meaningfully shape its crucial winter quarter.

See our latest analysis for Bath & Body Works.

The Candle Day buzz and heavy holiday promotions come at a time when momentum in the stock has been choppy, with a strong 7 day share price return contrasting sharply with a much weaker year to date share price return and a similarly negative one year total shareholder return. This suggests sentiment is still in repair mode even as management leans into traffic driving events.

If you like the seasonal story here but want more ways to play consumer demand, it is worth exploring fast growing stocks with high insider ownership as a source of fresh ideas.

With shares down nearly 50 percent year to date and trading at a sizable discount to analyst targets and intrinsic value estimates, is Bath & Body Works a contrarian opportunity, or is the market already discounting its future growth?

Most Popular Narrative: 53.3% Undervalued

With Bath & Body Works last closing at $19.01 against a narrative fair value in the low $40s, one detailed thesis argues the gap is far too wide.

Overall if you did not know the story behind the numbers then it would 100% look like a terrible company to own. However a big reason the companies numbers are not as good as they should be is because of the fact of how much debt they took from that split off from Victoria Secret.

Read the complete narrative.

Curious how modest top line assumptions, richer margins and a re rated earnings multiple combine to more than double today’s price? The narrative unpacks that math step by step.

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 pressure or weaker than expected international and male segment traction could quickly challenge the bullish long term valuation story.

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 build a personalized thesis 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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