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Investing.com - Deutsche Bank downgraded e.l.f. Beauty (NYSE:ELF) from Buy to Hold on Tuesday, while raising its price target to $128.00 from $121.00 previously. According to InvestingPro data, the company maintains impressive gross profit margins of 70.67% and has achieved 18.61% revenue growth in the last twelve months.
The downgrade comes after e.l.f. Beauty shares appreciated approximately 25% since early August, surpassing Deutsche Bank’s prior price target of $121.
Despite the rating cut, Deutsche Bank raised its price target to $128.00, citing a roll-forward in time and continued general optimism around medium-term top-line and profit growth opportunities.
The bank noted it continues to see room for sizable expansion across both the Elf and rhode product lines, particularly in overseas markets.
At current valuations of nearly 35 times next-twelve-months consensus earnings and 20 times next-twelve-months consensus EBITDA, Deutsche Bank expressed hesitation about maintaining its previous Buy rating.
In other recent news, e.l.f. Beauty reported sales growth of 9.0% year-over-year, reaching $353.7 million for the quarter ending in June, surpassing the consensus estimate of 8.5% growth. The company’s adjusted earnings per share were $0.89, exceeding expectations from both Canaccord and the broader market, which had anticipated $0.84. Following the company’s fiscal first-quarter results, Morgan Stanley upgraded e.l.f. Beauty from Equalweight to Overweight, citing an "attractive entry point" for investors and raising its price target to $134.00. Similarly, Deutsche Bank upgraded the stock to Buy after a 9.5% decline, maintaining a price target of $121.00 and noting a potential upside. BofA Securities reiterated its Buy rating with a $135.00 price target, adjusting its fiscal 2026 sales growth forecast to 25% following the acquisition of Rhode. Canaccord Genuity, however, lowered its price target to $128.00 from $150.00 due to tariff concerns, while still maintaining a Buy rating. Morgan Stanley also previously raised its price target to $114.00 based on the Rhode acquisition but maintained an Equalweight rating, highlighting a lack of clarity in the company’s earnings release. These developments reflect a mix of optimism and caution among analysts regarding e.l.f. Beauty’s future prospects.
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