Shares of personal care and home fragrance retailer Bath & Body Works (BBWI, Financial) fell 6.88% in the pre-market session after the company reported second-quarter earnings results. Its revenue and full-year earnings forecast missed Wall Street's estimates.
Full-year revenue is expected to decline year over year by -4% to -2%, down from the previous guidance of -2% to flat. The weak outlook was attributed to a "choppier macroeconomic environment" and first-half sales trends that were likely not encouraging.
Currently trading at $32.33, Bath & Body Works (BBWI, Financial) carries a market capitalization of $7.22 billion. The GF Value assessment suggests the stock is "Modestly Undervalued" with an estimated GF Value of $43.72. The company’s price-to-earnings (P/E) ratio is 8.33, indicating a relatively low valuation compared to its historical measures.
Despite the recent downturn, BBWI possesses a Piotroski F-Score of 7, indicating a strong financial position. The company’s operating margin is expanding, a positive sign for profitability. However, it faces minor financial stress, evidenced by an Altman Z-score of 2.61.
Analysts' target price for BBWI stands at an average of $49.6, suggesting potential upside. However, the stock's predictability rating remains low, necessitating caution for risk-averse investors.
On a positive note, Bath & Body Works (BBWI, Financial) has shown resilience with a revenue growth rate of 12.3% over the past three years, highlighting its potential for recovery once macroeconomic conditions stabilize.
