BBWI

Bath & Body Works Inc

Consumer


Presented:09/14/2021
Price:$63.41
Cap:$16.76B
Current Price:$31.11
Cap:$6.82B

Presented

Date09/14/2021
Price$63.41
Market Cap$16.76B
Ent Value$28.73B
P/E Ratio9.74x
Book ValueN/A
Div Yield0.43%
Shares O/S264.37M
Ave Daily Vol3,976,740
Short Int6.59%

Current

Price$31.11
Market Cap$6.82B
Bath & Body Works, Inc. is a specialty retailers and home to America’s Favorite Fragrances, offering a breadth of exclusive fragrances for the body and home, including the selling collections for fine fragrance mist, body lotion and body cream, 3-wick candles, home fragrance diffusers and liquid hand soap. The company was founded by Leslie Herbert Wexner in 1963 and is headquartered in Columbus, OH.

Please note, after the close on August 2, 2021, L Brands Inc (LB) changed its company name and symbol to Bath & Body Works Inc (BBWI) after spinning off Victoria’s Secret & Co (VSCO). BBWI and VSCO began trading separately on August 3, 2021. 

Publicly traded companies mentioned herein: Bath & Body Works Inc (BBWI), Ulta Beauty Inc (ULTA), Victoria’s Secret & Co (VSCO) 

Highlights

The presenter is long shares of Bath & Body Works Inc (BBWI), seeing the growth profile of a best-in-class retailer with a margin structure of a CPG/beauty company, low- to mid-20% EBIT margins (2x ULTA’s EBIT margins), while trading at a discounted valuation. L Brands spun off Victoria’s Secret (VSCO), which began trading as a separate public company in August 2021. While a combined company, many investors believed that Victoria’s Secret was the flawed company, resulting in BBWI being under owned by investors. BBWI’s stock trades at $63 per share, ~15x 2022 Street EPS estimates or ~10x 2022 EV/EBITDA, while reasonable comps (e.g., ULTA) trade at 20x+ EPS and 12x -13x EBITDA. With upside to near-term numbers and a steady long-term growth algorithm , he sees shares appreciating to ~$85, or 18x his 2022 EPS estimate of ~$4.75, by the end of the year. Over the next twelve months, he thinks the stock could rerate and trade at $100+ per share, or 20x his 2023 EPS estimate of $5+.

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Idea Discussion

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