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Dara Mohsenian’s Buy Rating for e.l.f. Beauty: Boosted by Rhode Brand Success and Strong U.S. Performance

Dara Mohsenian’s Buy Rating for e.l.f. Beauty: Boosted by Rhode Brand Success and Strong U.S. Performance

Morgan Stanley analyst Dara Mohsenian reiterated a Buy rating on e.l.f. Beauty today and set a price target of $170.00.

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Dara Mohsenian has given his Buy rating due to a combination of factors that enhance the growth outlook for e.l.f. Beauty. The recent record-breaking launch of the rhode brand at Sephora, which was 2.5 times larger than the previous largest brand debut, has significantly boosted expectations for rhode’s sales growth. This has led to an increased annual sales growth assumption of approximately 45% for rhode over the next two years, alongside improved EBITDA margins, which are projected to rise by 250 basis points to 27.5%.
Furthermore, the strong performance of e.l.f. Beauty’s base business in the U.S., as indicated by positive scanner data trends, supports the long-term growth potential of the company. Despite maintaining a conservative stance on the base ELF assumptions, the overall risk/reward profile remains attractive with a 26% upside potential based on FY27 EBITDA estimates. Consequently, the price target has been raised to $170 from $134, reflecting the increased confidence in both the rhode brand’s trajectory and the solid foundation of e.l.f. Beauty’s core operations.

In another report released on October 2, Goldman Sachs also maintained a Buy rating on the stock with a $155.00 price target.

Based on the recent corporate insider activity of 76 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 ELF in relation to earlier this year.

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