- Morgan Stanley analyst Dara Mohsenian reiterated an Overweight rating on the shares of elf Beauty Inc ELF and raised the price target to $46 from $42, implying a 14% upside.
- ELF remains the analyst’s preferred SMID cap pick, with recent U.S. scanner data confirming potential fundamental upside near-term and driving higher estimates/price target.
- Also Read: Elf Beauty Outperforms Peers: Expect 16% Sales Growth In Fiscal 2023, Analyst Says
- ELF momentum is being driven by its market share gains, which are accelerating as it implemented pricing with limited resulting volume demand elasticity, and as lower-price portfolio benefits from recent consumer trade-down, said Mohsenian.
- The company’s share gains, the analyst added, should also drive longer-term momentum with a virtuous cycle as retailers allocate more shelf space to ELF, driving sales.
- The analyst considers topline upside should also allow for continued reinvestment in marketing, further supporting share gains.
- Mass beauty category growth continues to recover post-COVID, specified Mohsenian.
- Peer Coty Inc. COTY recorded 10% growth in its Q4 and predicted FY23 to be a year of continued expansion, in-line with medium-term growth targets.
- Also Read: Coty Aims To Double Skincare Sales By FY25
- Also, Goldman Sachs analyst Jason English upgraded Estee Lauder Companies, Inc. EL from Neutral to Buy and raised the price target from $298 to $303.
- Price Action: ELF shares are trading higher by 1.72% at $40.20 on the last check Wednesday.
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