1. Bath & Body Works (NYSE:BBWI)
Forward P/E: 9.4
Analyst Upside Potential as of September 23, 2024: 41.50%
Number of Hedge Fund Holders as of Q2 2024: 55
Bath & Body Works (NYSE:BBWI) is an omnichannel retailer specializing in personal care and home fragrance. It sells merchandise through its retail stores in the US and Canada, its websites, and other channels under a portfolio of brand names, including Bath & Body Works, White Barn, and others. It also operates an international business network managed through its license, franchise, and wholesale partners.
Bath & Body Works (NYSE:BBWI) specializes in various home fragrances and care, including body lotion and body cream, fine fragrance mist, home fragrance diffusers, 3-wick candles, and liquid hand soap. It holds a competitive market advantage due to its accessible prices, unique combination of fragrances, and packaging. The company operates in a network of around 1,850 company-operated stores and e-commerce sites in Canada and the US. In addition, it also manages more than 500 stores and 28 e-commerce sites in more than 40 countries operating under license, wholesale, and franchise arrangements.
Although Bath & Body Works (NYSE:BBWI) functions amid a challenging landscape of value-driven consumers and economic uncertainty, it is undertaking actions to drive growth in its core portfolio. It is also expanding into new adjacency end markets, using its agile model to adapt to a dynamic environment, expanding margins, and cutting costs to optimize business.
In Q2 2024, it continued its investments to strengthen its operating foundation and built a platform with an emphasis on five key growth strategies: engaging with customers, expanding its reach, improving operational efficiency and excellence, elevating the Bath & Body Works (NYSE:BBWI) products and brand, and enabling a seamless omnichannel experience.
It is making solid progress across these elements, innovating its portfolio and leveraging speed to continuously improve its products’ ingredients, quality, efficacy, packaging, and fragrances.
The company is also making significant investments in its product and marketing category in an attempt to strengthen brand loyalty and category leadership. Its wide array of price points gives it a market advantage, selling items ranging from $2 PocketBac to $60 Eau de Parfum. It also offers a breadth of product points within categories, extending its reach.
Overall, BBWI ranks first among the 11 cheap retail stocks to buy according to analysts. While we acknowledge the potential of retail companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than BBWI but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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