BBWI - RayJay sees Bath & Body Works as a 'Strong Buy' after recent selloff

Bath & Body Works ( NYSE: BBWI ) presents a key buying opportunity after a steep selloff in recent months, according to Raymond James analyst Olivia Tong.

Tong advised that the stock’s over 50% decline since the start of May has priced in “almost a complete wind-down of the growth the company realized during the pandemic” and is ultimately overdone. She indicated that even if a recession on par with the Great Financial Crisis comes to fruition, the selloff has still left shares below an appropriate price.

“We see a long runway of growth ahead for BBWI even If the near-term comes under pressure,” Tong told clients. “This is supported by BBWI’s robust innovation pace, leading market positions, a mostly domestic, vertically-integrated supply chain, runway in square footage and real estate optimization, promotional capabilities in key traffic-driving categories, a loyalty program fully rolling out this year, margins at the high end of the peer group, and strong cash generation.”

As such, she assigned a “Strong Buy” rating to the stock with a $45 price target. Shares rose 2.61% in Wednesday’s premarket trading on the bullish review.

Read more on Piper Sandler’s similarly bullish outlook .

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