Analyst Alexandra Straton from Morgan Stanley maintained a Buy rating on Bath & Body Works (BBWI – Research Report) and keeping the price target at $43.00.
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Alexandra Straton has given her Buy rating due to a combination of factors influencing Bath & Body Works’ current and future performance. The company recently announced a stronger-than-expected earnings per share for the first quarter, surpassing both market expectations and its own guidance. This performance is attributed to a higher quality of earnings, with gross margins expanding year-over-year, indicating a positive trend in the company’s financial health.
Additionally, the appointment of a new CEO, Daniel Heaf, is seen as a strategic move to drive growth, particularly with a focus on international expansion. The leadership change is expected to bring innovation and strengthen consumer connections, which are crucial for improving sales and margins. These developments suggest a potential for valuation re-rating, making the stock an attractive buy despite the possibility of a longer catalyst path.
In another report released yesterday, J.P. Morgan also maintained a Buy rating on the stock with a $43.00 price target.