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Investing.com - UBS lowered its price target on Bath & Body Works Inc. (NYSE:BBWI) to $32.00 from $36.00 on Friday, while maintaining a Neutral rating on the stock.
The firm cited limited upside to Wall Street’s fiscal year 2025 earnings per share estimates despite acknowledging the retailer’s strong position as a leader in its core product categories. InvestingPro data shows 9 analysts have recently revised their earnings estimates downward for the upcoming period.
UBS believes current revenue estimates already adequately account for Bath & Body Works’ growth potential, while the company has few levers available to drive margin improvements.
The firm expressed concern that new CEO Daniel Heaf’s wholesale channel expansion strategy could further pressure the company’s ability to expand its operating profit margins.
UBS expects Bath & Body Works’ price-to-earnings ratio to remain rangebound until a catalyst emerges to change market perception of its long-term earnings potential, which the firm does not anticipate occurring for at least two quarters.
In other recent news, Bath & Body Works Inc. reported its second-quarter 2025 earnings, which revealed a slight miss on earnings per share (EPS) compared to market expectations. The company posted an EPS of $0.37, just under the forecasted $0.38, resulting in a 2.63% negative surprise. However, revenue aligned with forecasts, coming in at $1.55 billion. Despite these results, TD Cowen has maintained its Buy rating and set a $38.00 price target for the company. The retailer slightly raised its guidance, with sales growth up 10 basis points and earnings per share approximately 1% higher at the midpoint. These improvements were countered by an $85 million tariff impact and higher selling, general, and administrative expenses, alongside softer-than-expected Q2 sales growth. These developments reflect ongoing challenges and opportunities for Bath & Body Works as it navigates current market conditions.
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