Bath & Body Works (BBWI – Research Report), the Consumer Cyclical sector company, was revisited by a Wall Street analyst today. Analyst Alexandra Straton from Morgan Stanley maintained a Buy rating on the stock and has a $41.00 price target.
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Alexandra Straton’s rating is based on several key factors that suggest Bath & Body Works holds potential for future growth. Despite a more negative tilt following the first-quarter results, Straton acknowledges the company’s potential for positive earnings per share revisions by 2025. This optimism is supported by Bath & Body Works’ favorable positioning in the market, characterized by higher category growth and profitability compared to its peers in the Specialty Retail sector.
Additionally, the company boasts several attractive business attributes, such as a nimble and domestic supply chain, a replenishable and defensive product assortment, and a higher relative exposure to off-mall locations. These factors, combined with the stock’s still-inexpensive valuation compared to its peers, underpin Straton’s Buy rating. Although there are concerns about the clarity of the path to consistent growth and the impact of strategic changes by new management, the overall outlook remains positive due to these underlying strengths.
In another report released yesterday, Piper Sandler also maintained a Buy rating on the stock with a $37.00 price target.