• Morgan Stanley maintains an "Underweight" rating for SBH, adjusting its price target from $14 to $16.
• SBH reported a revenue of $943.2 million in Q1 2026, surpassing Wall Street expectations with a 0.6% year-over-year increase.
• The company's adjusted EPS was $0.48, and adjusted EBITDA stood at $111 million, indicating a margin of 11.8%.

Sally Beauty Holdings (NYSE:SBH) is a prominent player in the beauty products industry, specializing in professional hair color. On February 10, 2026, Morgan Stanley maintained its "Underweight" rating for SBH, advising to hold the stock. At that time, the stock was priced at $17. Morgan Stanley also adjusted its price target for SBH from $14 to $16.

Recently, SBH held its Q1 2026 earnings call, as highlighted by Seeking Alpha. The company reported fiscal first-quarter results that exceeded Wall Street expectations, leading to a 4.5% increase in its share price during early trading. SBH achieved a revenue of $943.2 million, a 0.6% increase from the previous year, surpassing analyst predictions of $940.5 million.

The company's adjusted earnings per share (EPS) were $0.48, exceeding the consensus expectation of $0.46. Additionally, the adjusted EBITDA was $111 million, compared to the estimated $108.7 million, reflecting an 11.8% margin. However, the operating margin decreased to 8.1% from 10.7% in the same period last year, and consolidated comparable sales remained flat.

Despite these mixed results, SBH generated $93 million in cash flow from operations and $57 million in free cash flow during the quarter. The company used part of these proceeds to repay $20 million of its term loan debt. The stock is currently priced at $17, with a market capitalization of approximately $1.67 billion.