Bath & Body Works (NYSE:BBWI – Get Free Report) and Ulta Beauty (NASDAQ:ULTA – Get Free Report) are both retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, risk and institutional ownership.
Profitability
This table compares Bath & Body Works and Ulta Beauty’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Bath & Body Works | 12.43% | -44.03% | 14.45% |
| Ulta Beauty | 10.58% | 51.95% | 20.88% |
Volatility and Risk
Bath & Body Works has a beta of 1.82, indicating that its stock price is 82% more volatile than the S&P 500. Comparatively, Ulta Beauty has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Bath & Body Works | $7.43 billion | 1.08 | $878.00 million | $4.10 | 9.01 |
| Ulta Beauty | $11.36 billion | 1.69 | $1.29 billion | $24.99 | 16.61 |
Ulta Beauty has higher revenue and earnings than Bath & Body Works. Bath & Body Works is trading at a lower price-to-earnings ratio than Ulta Beauty, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings and target prices for Bath & Body Works and Ulta Beauty, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Bath & Body Works | 1 | 6 | 9 | 0 | 2.50 |
| Ulta Beauty | 1 | 12 | 11 | 0 | 2.42 |
Bath & Body Works currently has a consensus target price of $42.69, indicating a potential upside of 15.56%. Ulta Beauty has a consensus target price of $460.30, indicating a potential upside of 10.88%. Given Bath & Body Works’ stronger consensus rating and higher possible upside, research analysts clearly believe Bath & Body Works is more favorable than Ulta Beauty.
Insider and Institutional Ownership
95.1% of Bath & Body Works shares are held by institutional investors. Comparatively, 90.4% of Ulta Beauty shares are held by institutional investors. 0.3% of Bath & Body Works shares are held by company insiders. Comparatively, 0.4% of Ulta Beauty shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Summary
Ulta Beauty beats Bath & Body Works on 9 of the 14 factors compared between the two stocks.
About Bath & Body Works
Bath & Body Works, Inc. operates a specialty retailer of home fragrance, body care, and soaps and sanitizer products. It sells its products under the Bath & Body Works, White Barn, and other brand names through retail stores and e-commerce sites located in the United States and Canada, as well as through international stores operated by partners under franchise, license, and wholesale arrangements. The company was formerly known as L Brands, Inc. and changed its name to Bath & Body Works, Inc. in August 2021. Bath & Body Works, Inc. was founded in 1963 and is headquartered in Columbus, Ohio.
About Ulta Beauty
Ulta Beauty, Inc. operates as a specialty beauty retailer in the United States. The company offers branded and private label beauty products, including cosmetics, fragrance, haircare, skincare, bath and body products, professional hair products, and salon styling tools through its Ulta Beauty stores, shop-in-shops, Ulta.com website, and its mobile applications. It also offers beauty services, including hair, makeup, brow, and skin services at its stores. The company was formerly known as ULTA Salon, Cosmetics & Fragrance, Inc. and changed its name to Ulta Beauty, Inc. in January 2017. Ulta Beauty, Inc. was incorporated in 1990 and is based in Bolingbrook, Illinois.
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