Bath & Body Works, Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Bath & Body Works, Inc. (NYSE:BBWI) shareholders are probably feeling a little disappointed, since its shares fell 3.3% to US$45.68 in the week after its latest yearly results. Revenues were US$7.4b, approximately in line with whatthe analysts expected, although statutory earnings per share (EPS) crushed expectations, coming in at US$3.84, an impressive 24% ahead of estimates. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
See our latest analysis for Bath & Body Works
Taking into account the latest results, Bath & Body Works' 19 analysts currently expect revenues in 2025 to be US$7.42b, approximately in line with the last 12 months. Statutory earnings per share are forecast to sink 15% to US$3.32 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$7.44b and earnings per share (EPS) of US$3.39 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 8.7% to US$50.43, suggesting the revised estimates are not indicative of a weaker long-term future for the business. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. There are some variant perceptions on Bath & Body Works, with the most bullish analyst valuing it at US$78.00 and the most bearish at US$40.00 per share. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.
Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing that stands out from these estimates is that shrinking revenues are expected to moderate over the period ending 2025 compared to the historical decline of 12% per annum over the past five years. Compare this against analyst estimates for companies in the broader industry, which suggest that revenues (in aggregate) are expected to grow 5.2% annually. So while a broad number of companies are forecast to grow, unfortunately Bath & Body Works is expected to see its revenue affected worse than other companies in the industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Bath & Body Works' revenue is expected to perform worse than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Bath & Body Works analysts - going out to 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 3 warning signs for Bath & Body Works (1 is potentially serious!) that we have uncovered.
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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.
