Deutsche Bank upgrades e.l.f. Beauty stock to Buy after 9.5% drop

Published 08/08/2025, 15:02
Deutsche Bank upgrades e.l.f. Beauty stock to Buy after 9.5% drop

Investing.com - Deutsche Bank (ETR:DBKGn) upgraded e.l.f. Beauty (NYSE:ELF) from Hold to Buy on Friday, maintaining a price target of $121.00 following the stock’s 9.5% decline on Thursday. According to InvestingPro data, analyst targets range from $112 to $150, with the stock currently trading at elevated valuation multiples.

The significant drop occurred after e.l.f. Beauty’s fiscal first-quarter 2026 results, with shares falling below $100 while the S&P 500 remained relatively flat. Deutsche Bank views this price level as "an attractive entry point with compelling 20%+ potential upside."

The bank made no changes to its financial forecasts for the beauty company despite what it described as "elevated confusion and reservation" among investors regarding management’s guidance on second-quarter revenue and margin performance.

Investor concerns center around the timing and contribution of e.l.f.’s price increases, tariff flow-through, and impacts from the integration of rhode, with some fearing only "low double-digit revenue growth" for the quarter.

Deutsche Bank noted that any potential downside risk would likely be "solely timing-related, with minimal carryover effects" on the second half of the fiscal year or fiscal year 2027 outlook, adding that consensus estimates are settling "in a very reasonable spot."

In other recent news, e.l.f. Beauty reported its first-quarter earnings for fiscal year 2026, with net sales reaching $354 million, representing a 9% year-over-year increase. The company’s earnings per share (EPS) came in at $0.89, surpassing analyst expectations of $0.84. Following these results, Canaccord Genuity lowered its price target for e.l.f. Beauty to $128, maintaining a Buy rating despite concerns over tariffs. BofA Securities reiterated its Buy rating with a $135 price target, highlighting the company’s recent acquisition of Rhode and international expansion plans. Morgan Stanley (NYSE:MS) raised its price target to $114, maintaining an Equalweight rating due to the Rhode acquisition. The company did not provide guidance during its earnings call, citing tariff volatility. These developments reflect a dynamic period for e.l.f. Beauty as it navigates market conditions and expansion opportunities.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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