BBWI
Bath & Body Works, Inc.
$21.82
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Undervalued
Trading 49.4% below fair value
You pay
$21.82
Bear
$37.73
Fair
$43.12
Bull
$48.51
Bear
$37.73
+72.9%
$3.13 × 14x P/E
Fair
$43.12
+97.6%
$3.13 × 16x P/E
Bull
$48.51
+122.3%
$3.13 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
7.0x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $22.25 from 22 analysts, using a 25% weight on analyst consensus. That produces an estimated intrinsic value of $43.12 per share.
Warnings
Dividend-based valuation: $15.52 (below our primary estimate by 69%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $22.25 (from 22 analysts). Our estimate is 125% 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