Critical Analysis: Bath & Body Works (BBWI) versus Its Competitors

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

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	-22.68%	-59.62%	0.87%

Earnings & Valuation

This table compares Bath & Body Works and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Bath & Body Works	$7.43 billion	$878.00 million	8.97
Bath & Body Works Competitors	$8.67 billion	$153.35 million	-5.77

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.

Volatility & Risk

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

Dividends

Bath & Body Works pays an annual dividend of $0.80 per share and has a dividend yield of 2.2%. 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 2.6% and pay out 26.9% of their earnings in the form of a dividend.

Insider and Institutional 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 endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Bath & Body Works and its rivals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bath & Body Works	1	6	9	0	2.50
Bath & Body Works Competitors	93	868	1498	62	2.61

Bath & Body Works currently has a consensus price target of $41.88, suggesting a potential upside of 13.85%. As a group, “Retail stores, not elsewhere classified” companies have a potential upside of 10.26%. Given Bath & Body Works’ higher possible upside, analysts plainly believe Bath & Body Works is more favorable than its rivals.

Summary

Bath & Body Works beats its rivals on 9 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.