Shares of Bath & Body Works Inc. (NYSE: BBWI) have plummeted, closing just under $17, down over 60% from February levels. Despite the stock’s decline, its price-to-earnings ratio is at an all-time low of 5, making it one of the cheapest large-cap consumer stocks. Investors are eyeing a potential turnaround due to the attractive risk/reward profile.

Following a disastrous earnings report, confidence in Bath & Body Works wavered as revenue and earnings fell short. The stock hit multi-year lows, reflecting lost confidence and ongoing struggles in adapting to changing consumer preferences. However, a brand overhaul and cost-saving measures may signal the start of a turnaround for the company.

Analysts are taking notice of Bath & Body Works, with some maintaining neutral ratings but offering price targets above current levels. Citigroup and Wells Fargo reiterated Buy ratings with price targets of $21 and $25, respectively. Bank of America is the most optimistic, setting a $32 target, indicating substantial potential upside.

Despite challenges, Bath & Body Works presents an attractive risk/reward setup for investors. With improvements in execution and the potential for a turnaround, the stock’s valuation suggests limited downside and significant upside. Analysts are cautiously optimistic, hinting at a possible rebound in the stock’s performance.

Read more at Nasdaq: Bath & Body Works Hits Multi-Year Lows: Bargain or Trap?