Bath & Body Works is positioned for a fundamental inflection in 2025 following a difficult three years for the stock, according to JPMorgan. Analyst Matthew Boss upgraded shares to overweight from neutral. He also raised his price target to $47 per share from $41, which implies shares gaining 28.9% from where they closed on Friday. Shares have declined nearly 20% in the past 12 months. This is part of a larger downturn for the beauty company — in the past three years, Bath & Body Works has underperformed the S & P 500 by around 70 percentage points, according to Boss. Compared to its peers in the beauty sector, the company is trading around 40 percentage points lower, the analyst added. BBWI .SPX 1Y mountain Bath & Body Works versus the S & P 500 over the last 12 months However, Boss sees a “top and bottom line inflection opportunity” this year. The company has “consistent opportunities within adjacencies or through collaborations,” as well as “expanding high-teens operating margins, and visible shareholder returns with $825M+ of FCF generation annually,” Boss wrote in a client note on Tuesday. The high free cash flow levels support around $1.7 billion in share repurchases over 2025 and 2026. When combined with a 2% dividend, shareholders can earn 9% in returns solely from capital allocation, according to Boss. Shares jumped 4.5% Tuesday before the bell. Analysts covering the stock are mostly bullish, according to LSEG. Of the 19 who cover Bath & Body Works, 12 rate it a buy or strong buy. The average analyst price target implies upside of 25%.
