UBS raised its price target on Bath & Body Works Inc. (NYSE:BBWI) to $22.00 from $21.00 while retaining a Neutral rating on the stock. The firm said its channel checks indicate sales trends at the specialty retailer have been slightly less pressured than the firm had expected, supporting the case for a small upside to near-term earnings.
Specifically, UBS projects the company can deliver a modest 5-cent beat to fourth-quarter fiscal 2025 adjusted earnings per share. The bank anticipates Bath & Body Works will provide fiscal 2026 EPS guidance in a range between $2.30 and $2.65 - a band that brackets the consensus Street forecast of $2.57. UBS characterized such guidance as likely to align with market expectations and said it does not expect the report to materially change sentiment toward the stock.
On the risk and volatility front, UBS described the upside and downside around the upcoming earnings release as balanced. The options market is currently implying a move of plus or minus 10.7% around the event, compared with a 7.7% historical average move for the company. UBS expressed an expectation for less volatility than the options-implied plus or minus 10.7% range.
Separately, Bath & Body Works has expanded its direct-to-consumer footprint by launching an official storefront on a major U.S. online marketplace. The company is offering a range of body care and home fragrance products through the storefront, including popular scent variants such as Champagne Toast and Eucalyptus Spearmint, alongside items like fine fragrance mists and candles.
In shareholder returns news, the company declared a regular quarterly dividend of $0.20 per share. The dividend is payable on March 6, 2026 to holders of record as of February 20, 2026.
The analyst landscape shows several recent moves. Jefferies has initiated coverage with a Hold rating and a $24.00 price target, citing strong foot and web traffic as reasons for raising its fourth-quarter estimates. A separate UBS note reiterated a Neutral rating with a $17.00 price target and forecasted a -1% five-year EPS compound annual growth rate as the company undergoes a multi-year business revamp. Meanwhile, BofA Securities trimmed its price target to $26.00 from $32.00 but maintained a Buy rating following third-quarter results that fell short of expectations.
Taken together, the analyst actions and the company's new e-commerce distribution channel and dividend decision underline ongoing strategic adjustments at Bath & Body Works. UBS's latest adjustment to its price target and its expectation for modest EPS outperformance suggest the bank views near-term operational trends as mildly supportive, even as broader sentiment appears unlikely to shift markedly on the upcoming report.