Bulletin
Investor Alert

Market Pulse Archives

Feb. 25, 2020, 8:54 a.m. EST

E.L.F. Beauty's $27 million clean cosmetics acquisition has plenty of potential benefits, analysts say

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    e.l.f. Beauty Inc. (ELF)
  • X
    Target Corp. (TGT)
  • X
    Amazon.com Inc. (AMZN)

or Cancel Already have a watchlist? Log In

By Tonya Garcia

Analysts are upbeat about E.L.F. Beauty Inc.'s /zigman2/quotes/202760864/lastsale ELF -4.78% $27 million acquisition of W3ll People, a clean cosmetics company that is expected to contribute $7 million in net sales and a penny per share in adjusted earnings in fiscal 2021. Launched in 2008, the company sells a cruelty-free, plant-based beauty line in some Target Corp. /zigman2/quotes/207799045/lastsale TGT +2.47% locations, at Whole Foods Market and specialty retailers. Whole Foods is part of Amazon.com Inc. /zigman2/quotes/210331248/lastsale AMZN -2.16% . E.L.F.'s Chief Executive Tarang Amin cited Mintel data showing that clean beauty is the fastest growing segment in the category during a post-announcement call on Monday. "[O]ver the past six years at E.L.F., we've reformulated our products to move away from parabens, phthalates and other ingredients consumers do not want to see in their cosmetics and skin care," he said, according to a FactSet transcript. Analysts at both D.A. Davidson and Cowen say the acquisition price is fair and see room for W3ll Beauty on shelves at new distribution points. E.L.F. also wants to expand internationally. Still, Cowen analysts cite one risk. "This represents E.L.F.'s first-ever acquisition, so integration risk - particularly as ELF completes its own turnaround strategy - is a risk factor we will be monitoring," analysts wrote. Cowen rates E.L.F. Beauty stock outperform with a $22 price target. D.A. Davidson rates the company's stock buy with a $24.50 price target. E.L.F. Beauty shares have soared 92% over the last year while the S&P 500 index /zigman2/quotes/210599714/realtime SPX -4.41% has gained 15.4% for the period.

/zigman2/quotes/202760864/lastsale
US : U.S.: NYSE
$ 9.37
-0.47 -4.78%
Volume: 922,113
April 1, 2020 6:30p
P/E Ratio
16.88
Dividend Yield
N/A
Market Cap
$491.59 million
Rev. per Employee
$645,978
loading...
/zigman2/quotes/207799045/lastsale
US : U.S.: NYSE
$ 95.27
+2.30 +2.47%
Volume: 8.58M
April 1, 2020 6:30p
P/E Ratio
14.97
Dividend Yield
2.77%
Market Cap
$46.57 billion
Rev. per Employee
$209,322
loading...
/zigman2/quotes/210331248/lastsale
US : U.S.: Nasdaq
$ 1,907.70
-42.02 -2.16%
Volume: 4.12M
April 1, 2020 4:00p
P/E Ratio
82.88
Dividend Yield
N/A
Market Cap
$970.68 billion
Rev. per Employee
$359,671
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
2,470.50
-114.09 -4.41%
Volume: 3.67B
April 1, 2020 5:09p
loading...

This Story has 0 Comments
Be the first to comment
More News In
Industries

Story Conversation

Commenting FAQs »
Link to MarketWatch's Slice.