Value
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 9.7 |
| P/S | 9.9 |
| EV/EBITDA | 8.0 |
| Fwd P/E | 9.5 |
| PEG | 7.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 8.2x
- ▸PEG: 0.88
- ▸Attractively valued
BBWI · Why this verdict
Why Bath & Body Works (BBWI) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At a forward P/E of 6.8x, a PEG ratio of 0.75, and a margin of safety cited at 63%, the stock screens attractively priced; the near-term target implies approximately 14% upside with a risk/reward ratio of roughly 2-to-1 in the buyer's favor, and analysts see approximately 31% upside to their consensus targets. Value | The stock advances toward the $22.25 price target over the next 12 months as the valuation discount narrows, with the analyst consensus upside of 31% providing a longer-range reference point for the full thesis. | →Stable |
| CounterCheap multiples in a confirmed technical downtrend can remain depressed for extended periods without a catalyst; if the consumer spending environment softens further, forward earnings estimates could be cut, eroding the low-multiple thesis before the price recovers. | ||
The most recent annual filing identified three medium-severity concentration risks, suggesting meaningful reliance on a limited set of suppliers, customers, or channels — a potential shock amplifier if any concentration point is disrupted in a consumer spending downturn. Risk | Concentration risk disclosures fall to fewer than 2 medium-rated items in the next annual filing, indicating active diversification of the critical dependencies. | →Stable |
| CounterMedium-severity concentration risks are common in specialty retail and often persist for years without causing material harm; their presence in the filing may reflect disclosure discipline rather than acute operational vulnerability. | ||
The stock sits below a 200-day moving average that is declining at 7.1% per month — a confirmed downtrend, not a pullback — and a death cross has recently formed; while the MACD is improving and RSI is at 62, the longer-term structural trend is negative and requires the moving average to flatten and reverse before a technically clean setup emerges. Momentum | The 200-day moving average flattens and turns higher within two quarters, and the stock establishes a sustained position above it, reversing the confirmed downtrend. | →Stable |
| CounterThe improving MACD and RSI near 62 indicate near-term price momentum is recovering even as the longer-term trend is still negative; if earnings continue to beat, the stock could reclaim the 200-day average before the indicator formally turns positive. | ||
After two consecutive quarters of missing estimates, the two most recent quarters each beat consensus — by 10% and 16% respectively — suggesting the business may be stabilizing and that more conservative guidance has given way to a period of over-delivery. Earnings | A third consecutive quarterly beat above 5% cements the view that the prior misses were a temporary soft patch rather than a structural earnings deterioration. | →Stable |
| CounterTwo beats after two misses leaves the four-quarter record split evenly, with a modest average across all periods; the signal is too early to call a sustained inflection, and revenue continues to decline approximately 3% year-over-year, leaving top-line momentum absent. | ||
At a forward P/E of 6.8x, a PEG ratio of 0.75, and a margin of safety cited at 63%, the stock screens attractively priced; the near-term target implies approximately 14% upside with a risk/reward ratio of roughly 2-to-1 in the buyer's favor, and analysts see approximately 31% upside to their consensus targets.
→StableValue
- Expectation
- The stock advances toward the $22.25 price target over the next 12 months as the valuation discount narrows, with the analyst consensus upside of 31% providing a longer-range reference point for the full thesis.
CounterCheap multiples in a confirmed technical downtrend can remain depressed for extended periods without a catalyst; if the consumer spending environment softens further, forward earnings estimates could be cut, eroding the low-multiple thesis before the price recovers.
The most recent annual filing identified three medium-severity concentration risks, suggesting meaningful reliance on a limited set of suppliers, customers, or channels — a potential shock amplifier if any concentration point is disrupted in a consumer spending downturn.
→StableRisk
- Expectation
- Concentration risk disclosures fall to fewer than 2 medium-rated items in the next annual filing, indicating active diversification of the critical dependencies.
CounterMedium-severity concentration risks are common in specialty retail and often persist for years without causing material harm; their presence in the filing may reflect disclosure discipline rather than acute operational vulnerability.
The stock sits below a 200-day moving average that is declining at 7.1% per month — a confirmed downtrend, not a pullback — and a death cross has recently formed; while the MACD is improving and RSI is at 62, the longer-term structural trend is negative and requires the moving average to flatten and reverse before a technically clean setup emerges.
→StableMomentum
- Expectation
- The 200-day moving average flattens and turns higher within two quarters, and the stock establishes a sustained position above it, reversing the confirmed downtrend.
CounterThe improving MACD and RSI near 62 indicate near-term price momentum is recovering even as the longer-term trend is still negative; if earnings continue to beat, the stock could reclaim the 200-day average before the indicator formally turns positive.
After two consecutive quarters of missing estimates, the two most recent quarters each beat consensus — by 10% and 16% respectively — suggesting the business may be stabilizing and that more conservative guidance has given way to a period of over-delivery.
→StableEarnings
- Expectation
- A third consecutive quarterly beat above 5% cements the view that the prior misses were a temporary soft patch rather than a structural earnings deterioration.
CounterTwo beats after two misses leaves the four-quarter record split evenly, with a modest average across all periods; the signal is too early to call a sustained inflection, and revenue continues to decline approximately 3% year-over-year, leaving top-line momentum absent.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Bath & Body Works trades at a deeply discounted forward P/E with approximately 14% upside to the near-term price target and a roughly 2-to-1 risk/reward ratio in the buyer's favor, but a confirmed technical downtrend and a news-driven caution overlay prevent a clean entry and require the longer-term trend to repair before the valuation thesis can fully express.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROA | 9.3 |
| Gross margin | 4.6 |
| Op margin | 4.4 |
| Net margin | 5.0 |
| Current ratio | 5.1 |
| FCF quality | 7.0 |
| Moat | 4.5 |
| Piotroski F | 6.7 |
- ▸No competitive moat
Growth
5.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 1.7 |
| EPS growth | 10.0 |
- ▸Declining revenue: -3%
Momentum
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.2 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 7.5 |
| Volume | 3.9 |
- ▸Overbought (RSI 77)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat/negative + RSI 77 (late-cycle distribution risk)
Sentiment
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| Price target | 6.6 |
| erm sentiment | 4.7 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
5.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 8.1 |
| quality rank | 7.8 |
| growth rank | 0.6 |
- ▸Attractive P/E vs peers
Technical
3.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.9 |
| support resistance | 0.9 |
| 52w position | 4.2 |
| gap | 6.0 |
Risk (lower is worse)
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 5.8 |
| days to cover | 8.2 |
| volatility | 0.3 |
| put call | 7.2 |
| implied vol | 2.3 |
| beta | 5.5 |
- ▸High IV: 66%
- ▸Concentration risks: 3 MED (10-K Item 1A)
Catalyst
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 4.0 |
| dividend safety | 7.0 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend: 340.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier -1 (HOLD_IF_HOLDING → SELL_IF_HOLDING).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=-1Passed (6)
- MOMENTUM:7.1>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:58d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.2=NEGATIVE
Warning (2)
- DEATH_CROSS:momentum=7.1>=5.0 recovering
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.24
Upside
-3.5%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 77
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.39>1.3, MCap $4.7B<$5B
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:7.1>=5.5. Top dim: Value at 7.9; weakest: Technical at 3.0. No conviction either direction.
The strongest dimensions are Value at 7.9, Momentum at 7.1, and Quality at 5.8; the weakest are Technical at 3.0, Catalyst at 4.9, and Risk (lower is worse) at 4.9. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.24 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Deep Value Favorable Risk Reward
Trip ifForward earnings estimates are revised downward by more than 15%, removing the valuation margin of safety.
- P2Confirmed Downtrend Caps Technical Recovery
Trip ifThe 200-day moving-average slope rises above 0% and price rises above the 200-day moving average for 4 consecutive weeks.
- P3Earnings Recovery Two Consecutive Beats
Trip ifEPS surprise falls below -5% for 2 consecutive quarters, reverting to a miss pattern.
- P4Concentration Risks Amplify Downside
Trip ifConcentration risk disclosures fall to fewer than 2 medium-rated items in the next annual 10-K filing.