BMO Capital analyst Simeon Siegel maintained a Buy rating on Bath & Body Works (BBWI – Research Report) yesterday and set a price target of $50.00.
Simeon Siegel has given his Buy rating due to a combination of factors that highlight Bath & Body Works’ financial performance and potential for growth. The company has demonstrated a strong top- and bottom-line performance, with sales growth expected for the first fiscal year in several years, and an implied free cash flow yield of approximately 10-11%, indicating an undervalued stock. Despite recent market fluctuations and some confusion around short-term trends, Siegel sees the current sell-off as an opportunity for long-term investment.
Additionally, Bath & Body Works has shown resilience in its product categories, with notable sales increases in Body Care and Soaps and Sanitizers, while maintaining market share. The company’s gross margin has benefited from cost savings and improved distribution productivity, and its leverage position has improved, which is expected to provide further financial benefits. These elements, combined with a conservative management approach to guidance, suggest a favorable outlook for the company’s future performance.
Siegel covers the Consumer Cyclical sector, focusing on stocks such as Nike, American Eagle, and Ulta Beauty. According to TipRanks, Siegel has an average return of 4.5% and a 53.54% success rate on recommended stocks.
In another report released today, Bank of America Securities also reiterated a Buy rating on the stock with a $45.00 price target.