Bath & Body Works Stock Downgraded Due To This Risk: Details

Barclays analyst Adrienne Yih downgraded Bath & Body Works Inc (NYSE:BBWI) from Equal-Weight to Underweight and lowered the price target from $31 to $28. The stock fell after the rerating.

Yih cited concerns over supply and demand risks that could negatively impact the company over the next 12 to 15 months.

While the guidance for the second half of 2024 has been adjusted to lower expectations, the analyst anticipates continued pressure in 2025 with potential declines in sales and contracting margins.

Her analysis points to rising inventory levels that are not aligned with the pace of sales recovery, suggesting that promotional activity is indicative of weaker consumer demand.

The downgrading decision comes amid signs of a deteriorating U.S. consumer environment, coupled with negative trends observed in the beauty segment, including data from competitors like Estée Lauder (EL), Coty (COTY), and Ulta Beauty (ULTA).

Yih highlights three main catalysts for Bath & Body Works that could further weigh on its stock performance. The first catalyst involves promotional activities that might lead customers to stockpile products, particularly in categories like ...

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