Hedge funds cut NFLX, keep big bets on MSFT, AMZN, add NVDA
On Friday, UBS reiterated a Neutral rating on Bath & Body Works Inc. (NYSE:BBWI) with a price target set at $36.00. The firm acknowledged the company’s leadership in its core categories and recognized its long-term global growth opportunities. However, UBS cited two main reasons for the limited upside to the market’s fiscal year 2025 earnings per share estimates for Bath & Body Works: the lackluster growth rates in the company’s core categories and the limited options available to the company to enhance margins.
UBS expressed concerns about the potential risks associated with the ongoing CEO transition at Bath & Body Works, suggesting it could pose short-term challenges. Analysts at UBS anticipate the stock’s price-to-earnings ratio will remain stable until a significant event alters the market’s perception of the company’s long-term earnings potential.
The report also highlighted the initiatives by Bath & Body Works’ new CEO to expand the company’s distribution beyond its current channels, which could positively affect sales growth. However, UBS noted that these plans are still in the preliminary stages and that they will monitor for further details and signs of progress on these initiatives. The firm suggested that it might reconsider its stance on the stock but does not expect this to occur for at least two to three quarters, hence maintaining a Neutral position for the time being.
In other recent news, Bath & Body Works Inc. reported its first-quarter performance, which showed a year-over-year sales increase of 3% and earnings per share (EPS) of $0.49. Despite exceeding expectations, the company’s guidance for the second quarter was slightly below consensus estimates. Analysts have responded with mixed adjustments to their price targets. Telsey Advisory Group reduced its price target to $38 while maintaining an Outperform rating, citing the company’s steady guidance for fiscal year 2025. Goldman Sachs maintained a Buy rating with a $43 target, highlighting the company’s strategic positioning and growth initiatives. Raymond (NSE:RYMD) James kept an Outperform rating with a $37 target, noting the company’s focus on innovation and digital strategies. Morgan Stanley (NYSE:MS) adjusted its target to $41, maintaining an Overweight rating, though expressing concern over the company’s tariff protection. Piper Sandler also reduced its target to $37, holding an Overweight rating, and expressed optimism about the company’s leadership change and product innovation strategies.
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