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Investing.com - UBS maintained its Neutral rating and $150.00 price target on e.l.f. Beauty (NYSE:ELF) after the company disclosed additional financial details about its rhode acquisition. According to InvestingPro data, ELF currently trades at a P/E ratio of 77x, suggesting a premium valuation, while maintaining an impressive gross margin of 71%.
The cosmetics company released an 8-K filing on Friday providing historical financial information about rhode, the skincare brand that generates $212 million in annual sales for fiscal year 2025 (trailing twelve months ending March 2025).
Based on the newly disclosed figures, UBS calculates the acquisition is approximately 11% accretive to e.l.f.’s FY25 earnings per share, adding roughly $0.38 to EPS.
UBS noted that while there were no specific market expectations regarding margin or EPS accretion from the deal, the sales figures revealed in the filing may fall below what many investors anticipated, suggesting the direct-to-consumer momentum might not be as strong as hoped.
Despite potential investor disappointment with the sales data, UBS believes the bull case for e.l.f. Beauty remains largely intact, with much of the market optimism centered on rhode’s recent launch into Sephora retail locations. Analyst targets range from $128 to $170, reflecting mixed sentiment about the company’s valuation.
In other recent news, e.l.f. Beauty has garnered significant attention from investment firms due to its recent developments. Morgan Stanley raised its price target for e.l.f. Beauty to $170, citing the strong performance of the rhode skincare line, especially following its debut at Sephora. Similarly, BofA Securities increased its price target to $160, attributing this adjustment to a better-than-expected sales growth forecast and the successful launch of the rhode brand. Jefferies maintained a Buy rating on e.l.f. Beauty, highlighting the impressive $10 million in sales generated by rhode at Sephora within just two days.
Conversely, Deutsche Bank downgraded e.l.f. Beauty from Buy to Hold, even as it raised its price target to $128, noting the stock’s substantial rally. Beyond financial metrics, e.l.f. Cosmetics launched the "Animal Intelligence" campaign, featuring pet influencers and focusing on animal welfare. This initiative involves social media engagement and offers prizes like Chewy.com gift packs. These recent developments indicate a dynamic period for e.l.f. Beauty, with varied responses from different investment firms.
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