Bullish indicating open at $55-$60, IPO prices at $37
On Monday, Piper Sandler reaffirmed its Overweight rating and $39.00 price target for Bath & Body Works Inc. (NYSE:BBWI) following the company’s recent CEO transition and preliminary results for the first fiscal quarter. The firm’s analyst noted satisfaction with the company’s performance, as sales reached the high end of the management’s guidance and earnings surpassed expectations, primarily due to an improvement in gross margin percentage. Despite acknowledging potential challenges in the upcoming quarters, including the impact of tariffs, Piper Sandler views the situation as a relatively stronger setup within its coverage area.
The reiteration of the fiscal year 2025 guidance by Bath & Body Works suggests some anticipated softness in future quarters. However, Piper Sandler remains optimistic about the company’s prospects, citing the direction under new leadership that is focused on both immediate execution and long-term growth. The analyst expressed confidence in the investment value of Bath & Body Works, considering the strategic approach of the new CEO to navigate current market conditions while aiming for future expansion.
Bath & Body Works, a retailer specializing in personal care and home fragrance products, has been navigating a retail landscape that has faced numerous challenges, including supply chain disruptions and changing consumer behavior. The company’s ability to meet its first-quarter guidance and exceed profit expectations has been a positive signal to investors and market analysts alike.
The retailer’s emphasis on maintaining a strong gross margin percentage, despite external pressures such as tariffs, has been a key factor in its ability to deliver a solid bottom line. With the reaffirmed confidence from Piper Sandler, Bath & Body Works shares are positioned as an attractive option for investors looking for stability and growth potential in the retail sector.
As the market continues to monitor Bath & Body Works’ performance in the coming quarters, the company’s commitment to executing its strategic plan under new leadership will be crucial in achieving its long-term financial goals and maintaining investor confidence.
In other recent news, Bath & Body Works announced the appointment of Daniel Heaf as its new CEO, succeeding Gina Boswell. The company pre-announced its first-quarter financial results, reporting net sales of $1.4 billion and earnings per share of $0.49, aligning with the upper end of its guidance and surpassing EPS expectations. S&P Global Ratings upgraded Bath & Body Works’ credit rating to ’BB+’ from ’BB’, citing strong performance and significant debt reduction. The firm anticipates low-single-digit percent revenue growth over the next 12 months despite increased product costs and strategic investments. Meanwhile, Citi adjusted its price target for Bath & Body Works to $36 from $48, maintaining a Buy rating, reflecting concerns about higher tariffs and a weakening consumer environment. Goldman Sachs also maintained a Buy rating with a price target of $49, highlighting successful digital engagement and promotional strategies. Bath & Body Works has been noted for its robust free cash flow and innovative product offerings. These developments come amid the company’s efforts to navigate a complex retail landscape.
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