Morgan Stanley stays positive on e.l.f. Beauty (NYSE:ELF) on its view that the retailer's guidance may have landed on the conservative side.
Analyst Dara Mohsenian and team think ELF will post revenue growth far above consensus marks with continued ELF share gains and a category rebound post COVID. The firm keeps an Overweight rating and increases its price target to $37 from $34 off even greater conviction in topline growth.
"While higher costs are limiting near-term EBITDA flow through from revenue upside, with strong pricing power, we see ELF as well positioned to eventually recover some cost pressure, and see higher revenue as more sustainable."
Shares of ELF are down 6.57% premarket to $31.00 following the FQ2 earnings report.