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Bank of America raises price target on e.l.f. Beauty as momentum continues

Bank of America raises price target on e.l.f. Beauty (ELF) as momentum continues


By Michael Elkins

Bank of America reiterated a Buy rating on e.l.f. Beauty (NYSE:ELF) and raised the price target on the stock to $105.00 (from $75.00) after the company’s share value increased around 135% since September 2022. The increase comes largely due to ELF’s momentum in market share gains in color cosmetics, continued expansion of shelf space at major retailers, and exceptional product innovation resonating well with core consumers.

Analysts wrote in a note, “We continue to see room for outperformance and the next catalysts for the stock as: 1) further shelf space gains, 2) margin-accretive benefits from product innovation and the expansion of ELF Skin, and 3) category expansions and market share potential in lip and eye cosmetics.”

ELF has exceeded Street estimates and raised guidance through F23, and Bank of America continues to remain above consensus in F24 and F25. For F23, ELF has guided to net sales of $541-$555 million, or +38-39% growth y/y. In FQ4, the analysts expect sales to increase 46%, with gross margin +120bps; for the full year, they expect sales growth of 39% and gross margin expansion of +220bps, largely in line with management’s guidance of +200bps gross margin expansion.

Shares of ELF are up 0.54% in afternoon trading on Monday.



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