Jefferies Cautious on Bath & Body Works (BBWI) as Promotions Weigh on Margins
Bath & Body Works, Inc. (NYSE:BBWI) is included among the 10 Best Beaten Down Dividend Stocks to Buy Right Now.
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Bath & Body Works, Inc. (NYSE:BBWI) is one of the most beaten-down dividend stocks to invest in. The stock has fallen by over 31% since the start of 2025.
On October 13, Jefferies lowered its price target for BBWI from $32.00 to $28.50, while keeping a Hold rating on the stock. The firm observed that the company has made little headway in cutting back on promotional activity, both online and in stores. Despite management’s stated goal of relying less on discounts, new product releases are still being marked down soon after launch.
Jefferies also pointed out that the recent Disney Villains collection did not perform as well as the earlier Disney Princess collaboration, raising concerns about Bath & Body Works, Inc. (NYSE:BBWI)’s ability to sustain growth through product innovation rather than constant discounting.
Their research indicated that customer traffic, both in stores and online, has shown minimal improvement following new launches, suggesting that innovation alone has yet to meaningfully lift engagement.
Considering the continued dependence on promotions, the mixed results of new products, and the uncertain economic backdrop, Jefferies expects limited short-term growth in Bath & Body Works, Inc. (NYSE:BBWI)’s sales and margins.
That said, Bath & Body Works, Inc. (NYSE:BBWI) has been a consistent dividend payer, as the company has paid regular payouts to shareholders since initiating its dividend policy in 2021. Currently, it offers a quarterly dividend of $0.20 per share and has a dividend yield of 3.08%, as of October 16.
While we acknowledge the potential of BBWI as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
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