Bath & Body Works (BBWI) stock is extending gains on Aug. 18 after Citi analysts, led by Paul Lejuez, issued a bullish note in favor of the personal care products retailer. The firm upgraded BBWI this morning to “Buy” and announced a $25 price target, signaling potential upside of more than 25% from current levels over the next 12 months.
At roughly $20, Bath & Body Works shares currently sit just under the price at which they started the year.
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www.barchart.comQ2 Earnings to Drive Bath & Body Works Stock Higher
Paul Lejuez recommends buying BBWI shares at the current price, mostly because he expects the firm to post upbeat financials on Aug. 26.
Consensus is for the retailer to record $0.24 in earnings per share (EPS) for its fiscal Q2. While that would represent a 35% year-on-year decline, he expects Bath & Body Works to actually come in ahead of expectations and take a “positive tone about recent product launches.”
This, he believes, will prove sufficient to drive the company’s share price higher in the second half of 2026.
Note that Bath & Body Works pays a rather lucrative 4.02% dividend yield, which makes it even more attractive as a long-term holding.
BBWI Shares Could Benefit From Macro Tailwinds
According to the Citi analyst, tariff refunds following the Supreme Court’s aggressive rebuttal of President Donald Trump’s punitive levies may also benefit Bath & Body Works’ earnings in the near term.
Plus, fuel prices have come down rather significantly from about $110 per barrel for crude oil (CLU26) in early April, positioning the company strongly to exceed its initial full-year guidance.
Lejuez expects management to signal accelerating top-line trends on the earnings call, helping Bath & Body Works stock to climb toward its year-to-date highs.
Note that BBWI is currently trading at about 0.54x sales only, which represents a notable discount to its historical averages.
Wall Street Remains Bullish on Bath & Body Works
Note that other Wall Street analysts also believe Bath & Body Works is undervalued at current levels.
While the consensus rating on BBWI stock sits at “Hold” only, the mean price target of about $22.87 signals potential for a nearly 15% rally over the next 12 months.
www.barchart.com On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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