Bath & Body Works: New Disney Collaboration Offers Top- And Bottom-Line Inflection Opportunity: Analyst

The launch of Bath & Body Works Inc's BBWI new collaboration with Walt Disney Co DIS may lead to an inflection on both revenues and profits in fiscal 2025, according to JPMorgan.

The Bath & Body Works Analyst: Analyst Matthew Boss upgraded the rating for Bath & Body Works from Neutral to Overweight, while raising the price target from $41 to $47.

The Bath & Body Works Thesis: The company has launched a Disney Princess-inspired collection in stores and online, which includes 85 products spread across all categories, Boss said in the upgrade note.

Check out other analyst stock ratings.

The 85-piece product collection marks the largest collaboration in Bath & Body Works' history and is 3X the size of the Netflix Inc (NASDAQ: NFLX) collaborations throughout 2024, the analyst stated.

The Disney collaboration also spans "the widest price range to date," he added.

This could help the company generate 3% revenue growth in fiscal 2025, compared to the trailing three-year contraction of 2.5%, Boss commented.

Other drivers of revenue growth include management's guidance of low-single-digit square footage growth into 2025 and the combination of "product innovation, marketing, and technology collectively working together to support growth within the "core" categories of Home Fragrance, Body Care, and Hand Soaps/Sanitizers forecasted to grow +3% at an industry level the next 4 years," he further wrote.

Price Action: Shares of Bath & Body Workshad risen by7.21% to $39.10 at the time of publication on Tuesday.

Read More: