Proprietary checks at Target stores shows e.l.f. beauty products gained 17 percent in shelf space from 12 feet to 14 feet, Bolton Weiser said in the Tuesday upgrade note. (See her track record here.)
The increased exposure has resulted in e.l.f. ranking in the top three after Maybelline, at 20 feet, and L'Oreal, at 16 feet, the analyst said.
Encouragingly, e.l.f.'s closest rival, NYX, lost 6feet or 50 percent of its shelf space, she said.
The increased exposure at Target makes the case e.l.f. can win "main wall space" at a major U.S. drug chain, Bolton Weiser said.
Similar checks at Walmart Inc (NYSE: WMT) show that e.l.f. is the fifth-most visible brand, with unchanged shelf space of 10 feet, the analyst said.
The beauty brand is likely to provide fiscal 2020 guidance in early May, but the outgoing CFO "lowered the bar" by guiding toward negative POS trends next year, Bolton Weiser said.
Assuming the base business grows at 3 percent instead of declining in the first three quarters of 2020, sales could come in $12 million ahead of Street estimates, the analyst said.
The beauty company could see improved sales, as the first phase of "Project Unicorn" was complete by the end of March and impacts more than 350 SKUs and accounts for more than half of total retail sales, according to D.A. Davidson.
Shares of e.l.f. Beauty were trading higher by 3.38 percent at $11.94 at the time of publication Tuesday.
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|Apr 2019||DA Davidson||Upgrades||Neutral||Buy|
|Apr 2019||JP Morgan||Upgrades||Underweight||Neutral|
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