Hedge fund Third Point LLC increased its stake in American specialty retailer Bath & Body Works (NYSE:BBWI) to over 6%, as per the latest regulatory filing. The news pushed the stock up 4.4% in the extended trading session on December 8.
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According to the 13D filing, Loeb has expressed his concern about the high excessive executive pay packages given to executives. The activist investor seeks to reduce costs, improve the board’s communication and transparency with shareholders, and revive the overall financial health of the company. Remarkably, Third Point may even push for board changes if the above steps are not implemented successfully, the filing said.
Third Point’s founder and manager, Daniel Loeb, is known to induce strategic changes in companies to produce positive financial and stock price performance. Third Point initiated buying BBWI shares in October this year, and with the latest purchase, it now owns 13.7 million shares.
In its Q3FY22 results, BBWI reported better-than-expected revenue and earnings figures. However, its sales and margins are declining significantly relative to the prior year period. This may be the reason for Third Point’s push toward strategic changes at the retailer.
Is Bath & Body Works a Good Stock to Buy?
Analysts have a Strong Buy consensus rating on BBWI stock based on ten Buys and two Hold ratings. Also, the average Bath & Body Works stock prediction of $50.25 implies 19.2% upside potential to current levels. Meanwhile, BBWI stock has lost 38.2% so far this year.
Additionally, BBWI pays a regular quarterly common dividend of $0.20 per share, reflecting a current yield of 1.82%, making it an attractive investment option.
