BBWI - Bath & Body Works dips after UBS downgrades on recession risk

2023-03-29 10:09:05 ET

UBS turned cautious on Bath & Body Works ( NYSE: BBWI ) with a downgrade to Neutral from Buy.

The view from analyst Jay Sole is that a recession will significantly weigh on BBWI's sales and earnings and limit the stock from outperforming. The firm lower estimates for revenue growth with consumer pressure seen lasting through FY23 due to current inflationary trends. For BBWI, inflation and macro pressure is seen reducing consumer demand for body care, sanitizers, and candles.

"We see little chance of upside earnings surprises or P/E expansion in the near- to medium-term as the macro environment deteriorates. Over the long-term, we think BBWI will rebound and this is a main reason our rating is not Sell."

UBS slashed its price target on BBWI to $35 from $58.

Shares of BBWI fell 1.88% in early morning trading on Wednesday to $37.33.

Read the breakdowns on Bath & Body Works ( BBWI ) from Seeking Alpha contributors.

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