BBWI
Bath & Body Works, Inc.
$16.45
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 66.5% below fair value
You pay
$16.45
Bear
$42.98
Fair
$49.12
Bull
$55.26
Bear
$42.98
+161.3%
$3.07 × 14x P/E
Fair
$49.12
+198.6%
$3.07 × 16x P/E
Bull
$55.26
+235.9%
$3.07 × 18x P/E
Adjust Assumptions
16.0x
3.07$
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
5.4x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (22 analysts)
$21.17
Divergence from AlphaVal
132%
Summary
Applying a 16x P/E to adjusted EPS of $3.07, the base-case value is $49.12 per share. DDM cross-check: $12.09.
Warnings
Dividend-based valuation: $12.09 (below our primary estimate by 75%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $21.17 (from 22 analysts). Our estimate is 132% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples