E_Y_E/iStock Unreleased via Getty Images

E_Y_E/iStock Unreleased via Getty Images

Bath & Body Works (NYSE:BBWI ) preliminary cut to 2022 guidance was not enough to sour Wall Street bullishness on the name.

During Wednesday’s premarket session, the Ohio-based retailer slashed its EPS forecast for the second quarter from a range of $0.40 to $0.42 from a prior expectation of $0.60 to $0.65. Before the new guidance, analyst consensus had stood at $0.60 consensus. Management also reeled in full year sales forecasts, now anticipating the metric to be down mid to high single digits as compared to 2021. The retailer had previously expected a low single digit percentage increase.

However, the stock has not been hit by the preannouncement at all. In fact, Bath & Body Works (BBWI) shares have soared nearly 16% since Wednesday’s open. That continued bullishness has been reflected in spades on Wall Street, as multiple analysts advised clients that the stock remains attractive despite the guidance cut.

“Despite the revision, we reiterate our Strong Buy rating as we believe [Wednesday’s] estimate cut sufficiently reflects a slowdown while valuation is attractive even on our lowered forecasts,” Raymond James analyst Olivia Tong wrote after the announcement. “BBWI is trading well below peers despite categories with solid long-term prospects, a robust pace of innovation and the loyalty program rollout on August 22.”

In her view, the discount to its peers is unfair given the growth levers available to the company.

Stifel analyst Susan Anderson was inclined to agree, reiterating a “Buy” rating on the stock.

“Despite the negative news, we believe most of these expectations were already priced in,” she told clients. “A slowdown in sales due to macro issues as a short-term issue.”

Thus, she advised that she would remain a buyer of shares after the guidance cut. However, she did slash her price target from $67 to $44 after lowering the multiple assigned to shares and factoring in the cut to guidance.

Finally, Mark Altschwager voiced his opinion that a volatile trajector for shares is to be expected, but should not cloud longer term bullishness on the stock.

“Shares may remain volatile in the near term, but we continue to believe BBWI can deliver durable growth characteristics and healthy operating margins in the medium term, setting up for a multiple expansion opportunity,” he concluded.

As such, he retained an “Outperform” rating on the stock despite the disappointing preannouncement. To be sure, Altschwager too trimmed his forecasts, reining in his price target from $50 to $40.

Read more on broader softlines forecasts from key analysts.