Goldman Sees Bath & Body Works Valuation As Highly Attractive, Remains Bullish

Core Viewpoint - Goldman Sachs analyst Kate McShane maintains a Buy rating on Bath & Body Works Inc (BBWI) with a price target of $49.00, indicating confidence in the company's growth strategies and market positioning [1][5]. Group 1: Customer Engagement and Collaborations - BBWI is enhancing customer traffic during off-peak periods through collaborations, such as the Disney Princess collection, which has led to increased app downloads and search interest [1]. - The Disney collection has shown strong market impact, with peak search interest shortly after its launch [1][2]. Group 2: App Performance Metrics - In February 2025, BBWI's app downloads reached 349,000, marking a 42% year-over-year increase during the Disney Princess collaboration [2][3]. - Despite a slight 2% decline in downloads from February 2024, BBWI's app performance has improved significantly, with downloads up 52% from July 2022 and 214% from February 2019 [3]. Group 3: Pricing and Promotions - A study on BBWI's 3-wick candle pricing revealed a slight increase in prices for January and February 2025 compared to the previous year, while March 2025 prices dropped 13.6% year-over-year [4]. - In-store promotions for the first quarter align with averages since the fourth quarter of 2022, with the company focusing on higher Average Unit Retail (AUR) and continued market innovation [4]. Group 4: Valuation and Market Position - The price target of $49 is based on relative P/E multiples of 45%/55%/65% for downside/base/upside cases, with the stock currently trading at 8.9x NTM P/E, indicating an attractive valuation [5]. - The analyst's bullish rating reflects BBWI's ability to provide value through affordable luxuries and various growth initiatives [5].