Bath & Body Works (BBWI) valuation: assessing the stock after ongoing same-store sales weakness and declining EPS trends

Bath & Body Works (BBWI) is back in focus as another stretch of weak same store sales, capped by projections for a further 5% revenue drop over the next year, pressures the stock.

See our latest analysis for Bath & Body Works.

That weak demand story is showing up clearly in the market, with a year to date share price return of negative 47.8 percent and a one year total shareholder return of negative 48 percent. This signals fading momentum as investors reassess the risk reward trade off.

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With shares now trading at a steep discount to both intrinsic value estimates and analyst targets, investors face a key question: is Bath & Body Works mispriced after a brutal reset, or is the market accurately discounting weaker growth ahead?

Most Popular Narrative Narrative: 51.4% Undervalued

Bath & Body Works last closed at $19.79, while the most widely followed narrative pegs fair value at more than double that level, setting up a sharp disconnect.

Overall if you did not know the story behind the numbers then it would 100% look like a terrible company to own. However a big reason the companies numbers are not as good as they should be is because of the fact of how much debt they took from that split off from Victoria Secret.

Read the complete narrative.

Curious how a slow revenue picture still leads to such a rich upside case, according to Zwfis, the secret lies in future cash flows and profitability, not today’s headline trends.

Result: Fair Value of $40.73 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, lingering debt from the Victoria’s Secret split, as well as slower than expected international or male segment expansion, could easily derail this optimistic valuation path.

Find out about the key risks to this Bath & Body Works narrative.

Build Your Own Bath & Body Works Narrative

If you see the story differently or want to dig into the numbers yourself, you can shape a personalized view in just minutes with Do it your way.

A great starting point for your Bath & Body Works research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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