Bath & Body Works Stock (BBWI) Makes New Low Ahead of Earnings: What to Expect

Bath & Body Works stock (NYSE: BBWI) has hit a new low of $20.86 ahead of tomorrow's earnings, down 18.15% in the past month of trading. Markets are understandably anxious, parsing every available piece of information to gauge the potential trajectory of the stock.

EPS is expected to come in at $0.40 on the quarter, down almost 20% on the $0.49 per share this time last year. Revenue is expected to have shown a mild uptick of 1.41% to $1.63billion.

Technically, BBWI currently sits significantly below both the 50-day and 200-day simple moving averages, which stand at $26.16 and $29.79 respectively. This technical analysis paints a picture of a stock struggling to maintain upward momentum, suggesting a persistent downward trend that has many questioning if the stock can recover.

Adding some stability, Bath & Body Works declared a regular quarterly cash dividend of $0.20 per share on November 7th, payable on December 5th to shareholders of record as of November 21st. This move underscores the company's commitment to returning value to shareholders, a factor that could attract income-seeking investors, and potentially offset some of the negative sentiment.

Analyst ratings are split. While the consensus leans towards a “Moderate Buy” rating, price targets vary considerably. Barclays recently lowered its target price from $32.00 to $28.00, assigning an “equal weight” rating. In contrast, Morgan Stanley boosted its price objective from $40.00 to $43.00, giving the stock an “overweight” rating

BBWI's stock has also been sensitive to broader market conditions. The recent disappointing U.S. jobs report, showing a mere 22,000 jobs added in the last period and an unemployment rate climbing to 4.3%, has amplified concerns about a potential economic slowdown. This environment makes investors more risk-averse, impacting stocks like BBWI that are perceived as discretionary consumer spending dependent.

Daniel Heaf, CEO, and Eva Boratto, CFO, are scheduled to hold a conference call at 8:30 a.m. ET tomorrow. Markets will be listening  for insights into the company's performance, strategic initiatives, and outlook for the holiday season. The tone of the call, the clarity of the guidance, and the management's ability to address investor concerns could be crucial in what happens from here.