Shares of e.l.f. Beauty (NYSE: ELF) jumped 2.7% on Wednesday morning to 144.34 on Wednesday following a bullish update from Morgan Stanley, which raised its price target on the cosmetics company to $170 from $134, maintaining an Overweight rating.
Morgan Stanley cited the strong performance of Rhode, e.l.f. Beauty’s recently acquired skincare line as the key driver behind the upgraded outlook.
Following its debut at Sephora stores, Rhode reportedly delivered a “record-breaking” launch, prompting the brokerage to highlight its potential as a high-growth, high-margin complement to e.l.f.’s core product portfolio.
The firm noted that the Rhode launch has positively influenced earnings per share projections, although the boost is primarily expected in future periods.
For the current fiscal second quarter, Morgan Stanley maintained forecasts, explaining that gains from Rhode are largely offset by more conservative assumptions for e.l.f.’s base business.
Broad analyst sentiment remains positive
Investor enthusiasm is further supported by broader analyst coverage.
Of 17 brokerages tracked, 14 rate ELF stock as Buy or higher, while three have a Hold rating.
The median price target among analysts sits at $150, according to data complied by LSEG indicating general optimism about the company’s growth trajectory.
Bank of America Securities recently raised its price target to $160, maintaining a Buy rating, citing Rhode’s successful launch and projecting 26% sales growth in fiscal 2026.
Similarly, Jefferies reiterated a Buy rating with a $135 target, highlighting Rhode’s impressive initial sales, which reportedly exceeded $10 million in just two days.
Not all analysts are unequivocally bullish, however.
Deutsche Bank upgraded its price target to $128 but downgraded the stock from Buy to Hold, reflecting caution after a 25% rally in ELF shares since early August.
Despite differing short-term views, analysts broadly acknowledge Rhode’s contribution to e.l.f.’s growth story.
Strategic initiatives and market position
Beyond Rhode, e.l.f. Beauty has pursued several strategic initiatives aimed at enhancing brand engagement and market presence.
Recently, the company launched an “Animal Intelligence” campaign, which leverages pet influencers to support animal welfare causes.
The campaign encourages fans to submit pet photos for a chance to win prizes, including Chewy.com gift packs, demonstrating the company’s effort to blend marketing creativity with social responsibility.
Morgan Stanley’s long-term outlook remains bullish, projecting 19% higher EBITDA for fiscal 2027 compared with consensus Wall Street expectations.
Analysts see the Rhode line as central to sustaining growth while complementing e.l.f.’s established core products.
Meanwhile, the company continues to benefit from strong overall sales trends and favorable market conditions for high-margin skincare offerings.
With shares up nearly 17% year-to-date, e.l.f. Beauty is capturing attention from both retail and institutional investors.
The combination of Rhode’s strong debut, positive analyst sentiment, and creative marketing campaigns suggests that e.l.f. is well-positioned to maintain momentum in the competitive beauty and skincare sector.
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