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On Friday, Telsey Advisory Group adjusted its price target for Bath & Body Works Inc. (NYSE:) to $53.00, up from the previous $50.00, reiterating an Outperform rating on the stock. The adjustment follows a strong fiscal year for the company, featuring four quarters of better-than-expected earnings and notable performance during the critical holiday season.
The company’s fourth-quarter results were highlighted as a testament to brand health and customer appeal. Telsey noted that year-end earnings reflect a well-received product line and brand loyalty, despite conservative fiscal 2024 guidance from Bath & Body Works.
The upper range of guidance was just below consensus by a penny, recognizing the potential challenges posed by the current economic climate and changing consumer spending patterns.
Telsey remains optimistic about Bath & Body Works’ prospects, citing the company’s established market presence and a devoted customer base within a consumer sector characterized by frequent purchases of consumer goods.
The revised price target of $53 is based on expected earnings growth in fiscal 2024, with Telsey applying a 14x multiple to its two-year earnings per share (EPS) estimate of $3.78. This valuation is consistent with the multiples observed in recent trading. The updated target reflects Telsey’s anticipation of continued earnings expansion for Bath & Body Works in the coming year.
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