Deutsche upgrades e.l.f. Beauty after stock drop, sees timing issues overstated

Published 08/08/2025, 14:52
© Reuters.

Investing.com -- Deutsche Bank upgraded e.l.f. Beauty (NYSE:ELF) to Buy from Hold, saying the recent sell-off has created an attractive entry point despite near-term investor concerns around revenue and margins.

Shares of e.l.f. fell nearly 10% on Thursday, a move Deutsche Bank (ETR:DBKGn) called overdone given that it made no changes to its longer-term forecasts.

The firm reiterated its $121 price target, implying more than 20% upside from current levels.

Investor caution following the company’s fiscal Q1 results has centered on second-quarter guidance and the impact of price increases, tariffs, and the integration of Rhode, a recent acquisition.

Deutsche Bank acknowledged the short-term uncertainty but said the risks appear mostly tied to timing, not a fundamental change in outlook.

The bank noted that management’s revenue guidance—described as “greater than 9%” growth—has sparked some concern that expectations for the quarter may be too high.

But it said consensus estimates remain reasonable and that any softness would likely not spill over into the second half or fiscal 2027.

e.l.f. Beauty has a market cap of around $6 billion. The stock closed Thursday below $100

"From our perspective, any such downside risk would likely be solely timing-related, with minimal carryover effects on our 2H or FY27 outlook. However, moreover, we instead see consensus numbers settling out in a very reasonable spot," analysts said.

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