Bath & Body Works (NYSE: BBWI), the largest specialty home fragrance & body care product retailer in the U.S, formerly known as L Brands, has declined 23% over the last twenty-one trading days (one month) and currently stands near $56. It should be noted that the broader S&P500 returned a marginal decline during the same period. The company’s stock fell after the company’s updated earnings guidance fell short of the consensus for the fourth quarter. While BBWI expects its Q4 earnings to come at the high end of its previous guidance of $2.10 to $2.25, this compares to a consensus of $2.26. That said, BBWI further mentioned that its gross margins are expected to be down significantly compared to 2020 as costs outpaced retail price increases. However, the company also added that it estimates Q4 sales to be at the high end of its previous guidance for a mid-to-high-single-digit percent growth over 2020.
Now, is BBWI stock poised to decline further in the short term? Based on our machine learning analysis of trends in the stock price over the last ten years, there is a 67% chance of a rise in BBWI stock over the next month (twenty-one trading days). See our analysis on BBWI’s Stock Chance Of Rise for more details.
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If you are considering BBWI stock as an investment option over a longer time frame, you can explore our forecast for BBWI’s Valuation dashboard. We estimate the company’s valuation to be around $71 per share which is 21% above the current market price. This represents a P/EBITDA multiple of 6.6 for the company based on our forecast for BBWI’s EBITDA for the current fiscal year.
Calculation of ‘Event Probability’ and ‘Chance of rising’ using last 10 year data
 Returns of -6.8% or lower over five-day period in 187 times out of 2517 (7%); Stock rose in the next five days in 92 of these 187 instances (49%)
 Returns of -20% or lower over ten-day period in 36 times out of 2517 (1%); Stock rose in the next ten days in 31 of these 36 instances (86%)
 Returns of -23% or lower over twenty-one-day period in 39 times out of 2515 (2%); Stock rose in the next twenty-one days in 26 of these 39 instances (67%)
Also, BBWI Peer Comparisons summarizes how the company fares against peers on metrics that matter.
What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market consistently since the end of 2016.
|S&P 500 Return||-2%||-2%||108%|
|Trefis MS Portfolio Return||-7%||-7%||264%|
 Month-to-date and year-to-date as of 1/17/2022
 Cumulative total returns since the end of 2016