Options Bears, Analysts Target Bath & Body Works Stock

Puts are more than doubling calls in the options pits

Deputy Editor

May 19, 2022 at 2:07 PM

Bath & Body Works Inc (NYSE:BBWI) stock is down 7.6% to trade at $39.64, earlier hitting a one-year low of $38.35. Though the retailer's first-quarter results beat estimates, its reduced 2022 outlook is weighing on the stock. Plus, no fewer than five analysts slashed their price targets, including Credit Suisse to $49 from $64, with the firm noting they "struggle to embrace an apparent Covid-beneficiary in a category that consumers likely over-consumed in ’20 and ’21 -- and one that’s no longer beating Street topline estimates materially quarter to quarter."

Though the brokerage bunch steered clear of downgrades today, there is ample room for a pessimistic shift. Of the 16 analysts in coverage, 15 carry a "buy" or better rating. Plus, the 12-month consensus price target of $76.35 is still a 92.8% premium to current levels.

Over in the options pits, puts are more than doubling calls midday, with overall options volume running at five times the intraday average. So far, 26,000 puts and 11,000 calls have been exchanged, with the May 40 put seeing the most activity.

It's also worth noting that BBWI has landed on the short sell restricted (SSR) list today.Lastly, short interest makes up 7.9% of the stock's available float, or four days' worth of pent-up buying power.

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