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On Thursday, Deutsche Bank (ETR:DBKGn) increased its price target for e.l.f. Beauty shares, traded on the New York Stock Exchange (NYSE:ELF), from $80.00 to $96.00, while maintaining a Hold rating on the stock. According to InvestingPro data, the stock has shown remarkable momentum with a 9.33% gain in the past week, though it currently trades at a relatively high P/E ratio of 63.8x. InvestingPro analysis suggests the stock is trading above its Fair Value. The adjustment followed the company’s announcement of fourth-quarter fiscal year 2025 results that surpassed expectations. e.l.f. Beauty also reported a resurgence in U.S. consumer trends through May and received positive initial feedback from consumers and retailers regarding its planned pricing strategy, which is set to take effect on August 1st, in anticipation of potential tariff impacts.
Despite these positive developments, Deutsche Bank noted that considerable uncertainty remains in the operating environment. This is evidenced by e.l.f. Beauty’s decision not to provide guidance for fiscal year 2026. However, InvestingPro data shows the company maintains strong fundamentals with an impressive gross margin of 71.24% and a healthy current ratio of 3.05, indicating solid financial stability. Get access to 15+ additional exclusive ProTips and comprehensive analysis with an InvestingPro subscription. The company expects first-quarter 2026 reported trends to fall behind consumption due to the timing of last year’s figures and the delayed impact of pricing changes in relation to initial tariff costs.
Furthermore, e.l.f. Beauty recently announced the acquisition of the celebrity beauty brand Rhode for $1 billion, a valuation approximately five times its trailing twelve-month sales. Deutsche Bank analysts believe that while the acquisition is set to have a favorable and accretive initial impact, there are still questions regarding the long-term growth of Rhode and how it will integrate with e.l.f. Beauty’s broader portfolio.
The financial institution’s commentary highlighted the robust results of e.l.f. Beauty’s final quarter of the fiscal year 2025, which showed better-than-expected performance and confirmed stronger consumer trends. The company demonstrated strong revenue growth of 28.28% in the last twelve months, though analysts also pointed out the challenges and uncertainties that may affect the company’s outlook, such as the integration of the newly acquired brand and the potential impacts of tariffs on the business’s operations. For deeper insights into e.l.f. Beauty’s financial health and growth prospects, access the detailed Pro Research Report available exclusively on InvestingPro.
In other recent news, e.l.f. Beauty has reported better-than-expected fourth-quarter financial results, showcasing strong sales and earnings performance. The company has also announced its acquisition of the skincare brand Rhode for $1 billion, a strategic move anticipated to enhance its market presence. Analysts have responded positively to these developments, with TD Cowen raising the stock price target to $130, Morgan Stanley (NYSE:MS) to $105, Piper Sandler to $109, Jefferies to $115, and Canaccord Genuity to $114, each maintaining favorable ratings.
The acquisition is seen as a significant expansion opportunity, potentially bolstering e.l.f. Beauty’s position in the competitive beauty industry. Despite the absence of financial guidance for fiscal year 2026, analysts like those at Piper Sandler express confidence in the company’s growth and profitability prospects. Jefferies highlighted the robust sales growth, which was primarily driven by volume, and acknowledged the potential volatility from tariffs.
Canaccord Genuity noted the acquisition’s potential to positively impact e.l.f. Beauty’s earnings and EBITDA margins. Analysts across the board have emphasized the strategic benefits of the Rhode acquisition, viewing it as a valuable addition to e.l.f. Beauty’s product portfolio. The company’s adept handling of tariffs and pricing challenges has also been recognized as a positive factor contributing to its strong outlook.
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