In a report released yesterday, Oliver Chen from TD Cowen maintained a Buy rating on Sally Beauty, with a price target of $20.00.
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Oliver Chen has given his Buy rating due to a combination of factors tied to resilient profitability and improving strategic execution, despite only modest same-store sales. Management modestly raised long-term earnings guidance on the back of cost savings and efficiency efforts, while the company continues to generate strong cash flow, reduce debt, and repurchase shares, supporting a 10%+ earnings growth profile.
Chen also sees meaningful upside from ongoing modernization efforts, including stronger e‑commerce growth, store refreshes, new fragrance offerings, and enhanced customer engagement via licensed colorist consultations and digital initiatives. With the stock trading at a discount to its earnings potential and gross margins expected to remain above 50% as operating leverage improves over time, he views the valuation as compelling and the multi‑year earnings targets as realistic.
In another report released yesterday, TipRanks – xAI also reiterated a Buy rating on the stock with a $18.00 price target.
Based on the recent corporate insider activity of 16 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of SBH in relation to earlier this year.