E.l.f. Beauty shares look a lot more attractive after their 2024 sell-off, according to Morgan Stanley. Analyst Dara Mohsenian upgraded shares of the cosmetics stock to overweight from equal weight. Mohsenian also hiked his price target by $14 to $153, suggesting upside of almost 23% in the coming 12 months compared to last week’s close. “Valuation looks compelling relative to outsized [long-term] growth potential after a sharp pullback in the stock in H2 of 2024,” Mohsenian wrote to clients in a Monday note. Mohsenian noted that the stock is trading at roughly half of its recent highs. Shares finished 2024 down 13%, marking its first losing year since 2018, after trading above $218 last June. Shares briefly rose as much as 2.5% on Monday following the upgrade. ELF 1Y mountain e.l.f., 1-year Mohsenian’s call marks a reversal after downgrading e.l.f. to equal weight about a year ago. That move was due to concerns around outsized valuations, he said, as well as difficult sales comparisons and risks tied to tariffs. Now, Mohsenian said those overhangs have mostly abated. Additionally, the analyst said his call becomes even stronger when considering the lackluster outlook for other makers of consumer staples.
