In a report released yesterday, Jonna Kim from TD Cowen maintained a Hold rating on Olaplex Holdings (OLPX – Research Report), with a price target of $1.80.
Jonna Kim has given his Hold rating due to a combination of factors influencing Olaplex Holdings. The company is currently in a phase of brand rebuilding, showing promising signs of improvement. However, the execution in the fiscal year 2025 is crucial, especially with a new executive leadership team and increased marketing investments. While the beauty sector is experiencing short-term challenges, Olaplex is optimistic about its innovation pipeline for 2025.
Olaplex’s fourth-quarter earnings for 2024 exceeded expectations, driven by successful innovations and marketing campaigns that enhanced customer reception, particularly during the holiday season. Despite a better-than-expected performance, the company anticipates a compression in EBITDA margins due to substantial investments in U.S. marketing efforts. The fiscal year 2025 is viewed as a transitional period, with potential growth expected in 2026 as the brand continues to show signs of recovery. Therefore, the Hold rating reflects a cautious optimism, balancing the current improvements against the anticipated challenges and investments.
In another report released yesterday, Morgan Stanley also maintained a Hold rating on the stock with a $1.90 price target.