What Happened?

Shares of personal care and home fragrance retailer Bath & Body Works (NYSE:BBWI) jumped 9.1% in the morning session after JP Morgan upgraded the stock's rating from Neutral to Buy. The firm added "Our recent fieldwork and management access points to a fundamental inflection on both the top and bottom-line into FY25 upgrading BBWI to Overweight raising our Dec '25 price target to $47."

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What The Market Is Telling Us

Bath and Body Works’s shares are somewhat volatile and have had 14 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business. 

The biggest move we wrote about over the last year was 3 months ago when the stock gained 23% on the news that the company reported a "beat and raised" quarter. Q3 financial results exceeded analysts' revenue and EPS expectations. Guidance was also strong as it raised its Q4 revenue and EPS outlook. The company cited improved momentum with solid contributions from new and existing customers. This is an encouraging signal heading into the important holiday season. Overall, this was a solid quarter.

Bath and Body Works is up 3.7% since the beginning of the year, but at $39.31 per share, it is still trading 24.3% below its 52-week high of $51.94 from May 2024. Investors who bought $1,000 worth of Bath and Body Works’s shares 5 years ago would now be looking at an investment worth $1,632.

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