Jefferies analysts upgraded e.l.f. Beauty (NYSE:ELF) from Hold to Buy, setting a price target of $115.00. As a result, shares gained more than 4% intra-day today.
This upgrade was driven by a recent valuation decline in the stock, with the forward EBITDA multiple dropping from 37x to 23x for the next fiscal year. While concerns about interest rates have impacted high-multiple stocks, the current share price already accounts for challenging comparisons and a slowdown in Fast-Moving Consumer Goods (FDM) data.
Despite this, the analysts noted that e.l.f. Beauty still maintains strong underlying demand (+50%) and is expected to benefit from factors like mergers and acquisitions (M&A), international expansion, and market share gains, which should offset tough comparisons in fiscal year 2025. Jefferies views the stock as a good value proposition, with a projected EBITDA compound annual growth rate (CAGR) of over 30%.