Why is Bath & Body Works stock climbing today?

Bath & Body Works stock experienced a 2.9% increase in pre-market trading on Tuesday after the investment firm Citi upgraded the company's stock rating from Neutral to Buy. Citi's decision was driven by the perceived value created by Bath & Body Works' significant post-earnings decline, which made the stock an attractive investment opportunity.

This upgrade increased the number of Buy ratings on the stock to four, out of a predominantly Hold rating landscape, lending additional credibility to the underperforming company. The stock had previously dropped by around 8.3% in the previous month and continued to lag behind its 52-week high of $32.32, despite these factors Citi's analyst saw it as a favorable risk-reward situation.

In addition to the Citi upgrade, Bath & Body Works is set to release its Q2 2026 earnings before the market opens on August 26, with analysts forecasting earnings per share of approximately $0.21 on revenue of about $1.49 billion. The broader market had little impact on Bath & Body Works' stock move today, with the S&P 500 down 0.5%, the Nasdaq falling 1.2%, and the Dow Jones essentially unchanged.

The stock's gain can be attributed to the company-driven move, as the broader market was not contributing. In Q1, the company had exceeded earnings estimates, which may have encouraged investors to position themselves for a similar performance in the upcoming report. The Citi upgrade served as the main catalyst, rekindling interest in a stock that had been under sustained pressure, while the upcoming Q2 earnings added to the potential upside narrative, attracting speculative buyers into the pre-market session.