BofA Lifts e.l.f. Beauty Price Target Despite Near-Term Margin Pressure

BofA Securities raised its price target on e.l.f. Beauty (NYSE:ELF) to $135 from $113 while maintaining a Buy rating, pointing to longer-term upside potential despite softer first-quarter expectations.

The firm trimmed its Q1 sales growth estimate to 12% from 15% based on weaker early-quarter scanner data and adjusted its gross margin forecast to 69% from 70%, citing tariff impacts that will only be partially offset by upcoming price hikes set to take effect on August 1. Additionally, non-marketing SG&A is expected to grow faster than sales in the quarter, prompting a downward revision to the firm’s EBITDA estimate for Q1—from $90 million to $69 million.

Despite the short-term drag, BofA remains optimistic about e.l.f.'s trajectory. The analysts anticipate a rebound in sales growth and margin improvement beginning later this year, fueled by higher pricing, ongoing cost efficiencies, and potential supplier concessions. The revised price target reflects confidence in the company’s ability to sustain its category leadership and expand profitability over the medium term.