2023-04-14 11:04:28 ET
e.l.f. Beauty ( NYSE: ELF ) is an attractive stock given its ability to secure strong margins while still undercutting the prices of competitors, according to Truist.
That value proposition is expected to serve the company well as consumers tighten belts into 2023. The lower pricing as compared to peers like Coty ( COTY ) and Revlon also offers optionality to continue raising prices and defending margins, a trend the brand has pursued without harming volume growth thus far.
“As input/supply chain costs ease over the coming quarter we do not expect ELF to roll back its pricing,” equity analyst Bill Chappell wrote. “While ELF was partially trying to drive trials with its ultra-low-price points, that no longer appears to be a problem.”
He added that Walmart ( WMT ) has been “putting greater in-store emphasis on the beauty category” as of late, which stands to benefit the company’s sales. Target ( TGT ) has already made similar improvements, with positive results for e.l.f. Beauty ( ELF ) readily observable.
Chappell hiked his price target to $100 from $75 alongside the upgrade to Buy form Hold. Shares of the Oakland-based beauty company rose 2.58% on Friday, extending a triple-digit gain in the past year.
Read more on Morgan Stanley’s recent move to Buy .
For further details see:
e.l.f. Beauty upgraded at Truist on value proposition