In May, e.l.f. Beauty (NYSE:ELF) agreed to acquire rhode, a beauty brand founded by Hailey Bieber known for its collection of high-performance, skin-focused products.
The beauty industry is witnessing a surge in strategic acquisitions as companies vie to expand their product offerings and market reach. In this competitive landscape, e.l.f. Beauty's recent move to acquire Hailey Bieber's brand, rhode, marks a significant step in enhancing its portfolio and capitalizing on emerging consumer trends.
Bank of America (BofA) Securities has raised the price forecast for e.l.f. Beauty. Analyst Anna Lizzul adjusts fiscal 2026 sales growth to +26% vs. +25% prior on better-than-expected elasticities and a strong brand launch at Rhode.
BofA raised the price forecast from $135 to $160, with a Buy rating.
Also Read: e.l.f. Beauty Reports Better-Than-Expected Q1 Results: Details
BofA expects slightly better sales contribution from Rhode in the fiscal second quarter ($44 million vs. $42 million prior), with improving trends at ELF relative to price increases/elasticities to provide upside to sales growth through the fiscal fourth quarter.
Rhode is Sephora's largest brand launch in North America to date. The analyst expects replenishment to be faster than initially expected, with ELF benefiting in the fiscal second quarter.
As a reminder, ELF will not benefit from the sell-in of inventory to Sephora, which occurred before the close of the rhode acquisition.
In the fiscal first quarter, all sales growth came from higher volumes, while a less favorable mix weighed on gross margin.
The analyst anticipates continued margin pressure from elasticities in the fiscal second quarter, but expects this to be offset by a stronger product mix from fall innovations and Rhode's contribution later in FY26.
According to recent Nielsen data, price hikes on ELF products have largely offset volume declines, with all retailers adopting the increase by mid-to-late August.
Over the long term, the analyst expects sales growth to be driven mainly by volume.
Price Action: ELF stock is up 3.97% at $148.98 at the last check on Wednesday.
The stock is trading at a new 52-week high, according to Benzinga Pro data.
e.l.f. Beauty's impressive 132.68% return over the past six months highlights its strong momentum in the personal products industry, particularly as it operates within the consumer staples sector, which typically offers stability.
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