Bath & Body Works: Near-Term Outlook Still Poor, But Recovery Plan Has Merits (Rating Upgrade)
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Eleceed Capital604 FollowersFollow5ShareSavePlay(8min)CommentsSummaryBath & Body Works (BBWI) is upgraded to hold as valuation compresses, despite persistent weak near-term earnings and demand headwinds.BBWI's 'Consumer First Formula' turnaround plan targets $250M in cost savings to fund product and brand reinvestment, reducing dilution risk.Product simplification and tighter control of Amazon distribution channels are central to BBWI's recovery strategy, aiming for clearer brand messaging and improved margins.Sales remain soft, promotional intensity is high, and margin pressures persist, keeping BBWI's valuation rangebound until turnaround benefits materialize. Artfoliophoto/iStock via Getty Images Summary I downgraded to a sell rating for Bath & Body Works Inc. (BBWI) in September, with my key thesis being that demand is weak, elevated inventory meant potential margin pressure, and that the near-term earningsThis article was written byEleceed Capital604 FollowersFollowI'm a passionate investor with a strong foundation in fundamental analysis and a keen eye for identifying undervalued companies with long-term growth potential. My investment approach is a blend of value investing principles and a focus on long-term growth. I believe in buying quality companies at a discount to their intrinsic value and holding them for the long haul, allowing them to compound their earnings and shareholder returns.Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.