E.l.f. Beauty Shares Leap 7.7% Following Morgan Stanley Upgrade
Shares of cosmetics company e.l.f. Beauty (NYSE: ELF) soared 7.7% in morning trading after receiving a significant upgrade from investment bank Morgan Stanley. The bank expressed renewed confidence in the beauty brand’s performance trajectory, upgrading the stock from an “Equal-Weight” to an “Overweight” rating, and raising its price target to $134 from $114.
Morgan Stanley pointed to an “attractive entry point” for investors, following a 50% decrease in share value from last year’s peak. The bank argues that Wall Street is underestimating the profit boost from recent price increases and the acquisition of Rhode, a rapidly growing cosmetics brand. This positive sentiment is shared by Deutsche Bank and Goldman Sachs, who have also shown increased confidence in e.l.f. Beauty.
- Deutsche Bank recently upgraded the stock to a “buy” rating.
- Goldman Sachs maintained its “buy” rating and raised its price target to $137.
The upgrades come on the heels of e.l.f. Beauty’s fiscal first-quarter report, where the company exceeded earnings expectations. Revenue grew 9% year-over-year to $353.7 million. Despite withdrawing full-year guidance due to market uncertainty, analysts remain optimistic about the company’s long-term prospects in the competitive beauty market.