J.P. Morgan analyst Matthew Boss upgraded the rating on Bath & Body Works (BBWI – Research Report) to a Buy today, setting a price target of $47.00.
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Matthew Boss has given his Buy rating due to a combination of factors, including a positive outlook for Bath & Body Works’ revenue and operating margin growth. The company is expected to see a turnaround in its financial performance, with a projected inflection in both top and bottom-line figures into FY25. This anticipated growth is driven by several key factors such as post-pandemic normalization in key product categories, modest square footage expansion, and strategic initiatives in product innovation, marketing, and technology. These efforts are forecasted to translate into a 3% revenue growth, reversing previous declines.
Furthermore, the investment cycle is moving past significant expenditures, leading to an expected expansion in operating margins. This is supported by stabilization in marketing and technology expenses, allowing for more efficient cost management. The company is on track to achieve its long-term operating margin target, which positions it favorably among its peers. Additionally, Bath & Body Works’ strong free cash flow generation supports shareholder returns through dividends and share repurchases, adding to the attractiveness of the stock. These factors combined justify the Buy rating and an increased price target of $47 by December 2025.
According to TipRanks, Boss is a 3-star analyst with an average return of 2.1% and a 49.40% success rate. Boss covers the Consumer Cyclical sector, focusing on stocks such as Boot Barn, Carnival, and Tapestry.
In another report released on February 11, Telsey Advisory also maintained a Buy rating on the stock with a $43.00 price target.