ELF remains the analyst's preferred SMID cap pick, with recent U.S. scanner data confirming potential fundamental upside near-term and driving higher estimates/price target.
ELF momentum is being driven by its market share gains, which are accelerating as it implemented pricing with limited resulting volume demand elasticity, and as lower-price portfolio benefits from recent consumer trade-down, said Mohsenian.
The company's share gains, the analyst added, should also drive longer-term momentum with a virtuous cycle as retailers allocate more shelf space to ELF, driving sales.
The analyst considers topline upside should also allow for continued reinvestment in marketing, further supporting share gains.
Mass beauty category growth continues to recover post-COVID, specified Mohsenian.
Also Read: Coty Aims To Double Skincare Sales By FY25
Price Action: ELF shares are trading higher by 1.72% at $40.20 on the last check Wednesday.
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