Jefferies Cautious on Bath & Body Works (BBWI) as Promotions Weigh on Margins

Core Insights - Bath & Body Works, Inc. (NYSE:BBWI) is recognized as one of the most beaten-down dividend stocks, with a stock price decline of over 31% since the beginning of 2025 [2][5] - Jefferies has lowered its price target for BBWI from $32.00 to $28.50 while maintaining a Hold rating, citing ongoing promotional activities that are impacting margins [3][5] - The company's recent product launches, including the Disney Villains collection, have not met expectations, raising concerns about its ability to drive growth through innovation rather than discounts [4][5] Financial Performance - Bath & Body Works has consistently paid dividends since initiating its policy in 2021, currently offering a quarterly dividend of $0.20 per share, resulting in a dividend yield of 3.08% as of October 16 [6] Market Position - Jefferies notes that customer traffic has shown minimal improvement following new product launches, indicating that innovation has not significantly increased customer engagement [4][5] - The company faces challenges in achieving short-term growth in sales and margins due to its reliance on promotions and mixed results from new products [5]