Critical Review: Bath & Body Works (BBWI) vs. Its Peers

Bath & Body Works (NYSE:BBWI) is one of 27 publicly-traded companies in the “Retail stores, not elsewhere classified” industry, but how does it compare to its rivals? We will compare Bath & Body Works to related companies based on the strength of its earnings, valuation, risk, profitability, analyst recommendations, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings for Bath & Body Works and its rivals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	1	6	9	0	2.50
Bath & Body Works Competitors	95	874	1510	62	2.61

Bath & Body Works currently has a consensus target price of $41.88, suggesting a potential upside of 8.63%. As a group, “Retail stores, not elsewhere classified” companies have a potential upside of 10.55%. Given Bath & Body Works’ rivals stronger consensus rating and higher probable upside, analysts clearly believe Bath & Body Works has less favorable growth aspects than its rivals.

Volatility and Risk

Bath & Body Works has a beta of 1.83, suggesting that its share price is 83% more volatile than the S&P 500. Comparatively, Bath & Body Works’ rivals have a beta of 0.89, suggesting that their average share price is 11% less volatile than the S&P 500.

Valuation and Earnings

This table compares Bath & Body Works and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Bath & Body Works	$7.43 billion	$878.00 million	9.40
Bath & Body Works Competitors	$8.77 billion	$153.49 million	-6.10

Bath & Body Works’ rivals have higher revenue, but lower earnings than Bath & Body Works. Bath & Body Works is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

Bath & Body Works pays an annual dividend of $0.80 per share and has a dividend yield of 2.1%. Bath & Body Works pays out 19.5% of its earnings in the form of a dividend. As a group, “Retail stores, not elsewhere classified” companies pay a dividend yield of 2.5% and pay out 28.5% of their earnings in the form of a dividend.

Profitability

This table compares Bath & Body Works and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bath & Body Works	12.43%	-44.03%	14.45%
Bath & Body Works Competitors	-21.34%	-60.07%	0.73%

Institutional & Insider Ownership

95.1% of Bath & Body Works shares are owned by institutional investors. Comparatively, 33.7% of shares of all “Retail stores, not elsewhere classified” companies are owned by institutional investors. 0.3% of Bath & Body Works shares are owned by company insiders. Comparatively, 15.7% of shares of all “Retail stores, not elsewhere classified” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Bath & Body Works beats its rivals on 8 of the 15 factors compared.

About Bath & Body Works

Bath & Body Works, Inc. operates a specialty retailer of home fragrance, body care, and soaps and sanitizer products. It sells its products under the Bath & Body Works, White Barn, and other brand names through retail stores and e-commerce sites located in the United States and Canada, as well as through international stores operated by partners under franchise, license, and wholesale arrangements. The company was formerly known as L Brands, Inc. and changed its name to Bath & Body Works, Inc. in August 2021. Bath & Body Works, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.