BBWI Should I Buy
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Bath & Body Works Inc. is not a strong buy at this moment for a beginner investor with a long-term strategy and $50,000-$100,000 available for investment. The stock is facing significant financial and legal challenges, and while technical indicators are neutral to slightly positive, the lack of strong growth prospects and ongoing lawsuits make it a risky investment. Holding or waiting for further clarity on financial recovery and legal outcomes is advisable.
The MACD is slightly positive at 0.0116 and expanding, indicating mild bullish momentum. RSI is neutral at 59.265, and moving averages are converging, showing no strong directional trend. The stock is trading near its pivot level of 22.193, with resistance at 23.358 and support at 21.028. Overall, technical indicators suggest a neutral to slightly positive trend.
Analysts expect some improvement in the retail sector in 2026 due to macroeconomic tailwinds like lower interest rates and gas prices. Deutsche Bank and UBS see potential for revenue growth in the first half of 2026 due to tax refunds and easier weather comparisons.
The company is facing multiple class action lawsuits alleging financial misrepresentation and ineffective growth strategies. Financial performance in Q3 2026 showed significant declines in revenue (-0.99% YoY), net income (-27.36% YoY), and EPS (-22.92% YoY). Gross margin also dropped by 5.06%. Analysts have downgraded the stock significantly in recent months, with price targets lowered to the $17-$21 range. The stock has no recent congress trading data, and hedge funds and insiders remain neutral.
In Q3 2026, Bath & Body Works reported a revenue decline of -0.99% YoY to $1.59 billion. Net income dropped by -27.36% YoY to $77 million, and EPS fell by -22.92% YoY to $0.37. Gross margin decreased to 41.28%, down -5.06% YoY, reflecting weaker profitability.
Analyst sentiment is mixed to negative. Deutsche Bank resumed coverage with a Hold rating and a $21 price target. UBS raised its price target to $21 from $17 but maintained a Neutral rating. Barclays raised its price target to $20 but also kept an Equal Weight rating. Several analysts downgraded the stock in late 2025 due to disappointing Q3 results and ongoing challenges, with price targets lowered significantly.
