BBWI - Bath & Body Works is tipped by UBS for earnings day rally

UBS is constructive on Bath & Body Works ( NYSE: BBWI ) ahead of the retailer's Q3 earnings report.

Analyst Jay Sole and team project upward EPS revisions from the retailer after recent data suggested that BBWI's business trends improved during Q3 the quarter. The firm expects BBWI to raise the midpoint of its FY22 EPS guidance 3% to 4%, to $2.80 to $3.10 from $2.70-$3.00. That is seen being enough to lift sell-side EPS forecasts by a similar amount and boost overall sentiment on the na,e.

"Our conversations with investors indicate the market views BBWI as a de-risked stock. We think a FY22 guidance raise reinforces the market’s view, boosting sentiment."

UBS is also positive on incoming Bath & Body Works ( BBWI ) CEO Gina Boswell. Sole wrote the CEO hire looks like a good fit for the retailer since Boswell's areas of expertise match what BBWI said it was looking for. Boswell is anticipated to show BBWI how to evolve into a more global, omni-channel, multi-category brand vs. its current positioning.

UBS has a Buy rating on BBWI and price target of $36, which works out to 12X the FY24 EPS estimate.

The Seeking Alpha Quant Rating on BBWI is only at Hold, but the quant score is the 8th highest in the specialty stores sector.

Options trading is implying a share price up or down of 8% when BBWI reports earnings on November 16.

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