BUZZ-TD Cowen upgrades elf Beauty citing room to grow market share

Reuters04-17

** Shares of beauty retailer elf Beauty up as much as 4.8% at $173.65 after TD Cowen upgrades stock to "buy" from "hold"

** Brokerage believes ELF can double its business by FY27, driven by expanding unit volume, leading digital marketing and potential price increases in skin care

** Notes that ELF's average unit retail price is ~$6 compared to more than ~$9 for legacy brands and over $20 in prestige

** "We see upside in ELF shares based on their significant opportunity to grab shelf space gains at Ulta, Walmart, Target, and U.S. drug stores CVS and Walgreens" - analyst Oliver Chen

** ELF's "Holy Grail" products – Camo, Putty, Halo Glow and Power Grip – are viral favorites, offering prestige-quality products at extremely competitive price points, Chen says

** TD Cowen believes ELF has the potential to scale across many large markets abroad over time

** However, brokerage cuts PT on stock to $190 from $220 citing recent share weakness

** Over the past month, ELF has declined about 16%, up to last close

** So far this year, stock is up ~19%, including session's gains

(Reporting by Savyata Mishra in Bengaluru)

((Savyata.Mishra@thomsonreuters.com))

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