Investing.com -- Citi upgraded Bath & Body Works to Buy from Neutral ahead of the retailer’s second-quarter results next week, citing expectations for an earnings beat, a depressed stock price and potential upside from energy prices and tariff refunds. This combination of factors "creates a very attractive risk/reward" heading into the print, the bank’s analysts said.

Shares in the company rose more than 2% in premarket trading Tuesday.

Citi models second-quarter earnings per share of $0.26, above the consensus estimate of $0.24 and the company’s own guidance range of $0.20 to $0.25. The analysts pointed to the recent Fruit Fusion product collection as a likely success, saying it should give management confidence about entering the second half of the year as it introduces more new products and marketing.

The Wall Street firm kept its full-year 2026 estimates unchanged but said Bath & Body Works could see upside from lower energy prices, which have fallen since the company reiterated its guidance in the first quarter, as well as potential tariff refunds. It does not expect any change to the company’s second-half revenue outlook.

Citi maintained its price target of $25, noting the stock trades at 5.1 times forecast 2026 EBITDA. The risk/reward profile looks favorable both into the second-quarter print and over the next 12 months, it said.