Zinger Key Points
- elf Beauty’s stock is down around 50% from its peak early last year.
- The current share price does not reflect US share gains and strong international growth.
Following the steep pullback in elf Beauty Inc's ELF share price in the back half of 2024, the stock does not reflect the company's "attractive growth outlook," according to Morgan Stanley.
The elf Beauty Analyst: Analyst Dara Mohsenian upgraded the rating for elf Beauty from Equal-Weight to Overweight, while raising the price target from $139 to $153.
The elf Beauty Thesis: The company's share price is down around 50% from its highs early last year, Mohsenian said in the upgrade note.
Check out other analyst stock ratings.
There is upside to elf Beauty's revenue and EBITDA in the second half of the fiscal year, with continued market share gains in the U.S., strong international growth and the opportunity to expand the Naturium business, the analyst stated.
"We also see easier comparisons on the horizon as a positive catalyst that could drive upside even vs. our above consensus forecasts," he added.
The current share price offers "an opportunity to enter into a strong LT growth story, as we believe valuation has overshot to the downside," Mohsenian wrote.
ELF Price Action: Shares of elf Beauty had risen by 1.77% to $127.06 at the time of publication on Monday.
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