- Morgan Stanley analyst Dara Mohsenian reiterated an Overweight rating on the shares of E.L.F. Beauty, Inc. ELF and raised the price target from $75 to $94.
- The robust growth, the analyst noted, is being driven by the beauty category sustaining its momentum on a post-COVID basis, but importantly, even more so ELF's recent inflection in market share gains well above even strong historical levels.
- The analyst added that the breadth of ELF share gains is also strong beyond impressive magnitude.
- The analyst noted accelerating U.S. Scanner Data highlights near-term upside versus consensus and greater long-term growth potential than the market is pricing in.
- Longer term, the analyst expects a beauty category rebound post-COVID, as well as pronounced ELF share gains to continue, driven by much higher marketing.
- The company will also benefit from effective digital marketing acumen, continued innovation success, traction with younger consumers, white-space opportunity in skin care/international, incremental shelf space gains, and a near-term boost from consumer trade-down to ELF's lower-priced portfolio.
- The analyst is increasingly confident in ELF's momentum with recent scanner data strength that provides even greater visibility on prior expected near-term topline/EBITDA upside.
- The analyst expects significant revenue upside versus consensus short-term in fiscal Q4 and in FY24/25 with mid-single-digit – low-double-digit topline upside versus consensus.
- Price Action: ELF shares are trading lower by 0.09% at $82.28 on the last check Monday.
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