e.l.f. Beauty selloff brings good buying opportunity, says Piper Sandler

Piper Sandler believes a slight deceleration in credit card data for e.l.f. Beauty in the most recent four weeks is driving the outsized share weakness today. The stock is down 8% to $157.63 in mornign trading. The company’s tracked sales for the four weeks ended August 11 were up 17.6% year-over-year versus the prior four weeks that were up 27.1%, the analyst tells investors in a research note. The firm says that while e.l.f. continues to outpace the broader U.S. cosmetics and skin care market, which declined 4.0% in the four weeks ended August 11, there has been an observable slowdown in year-over-year growth over the last several weeks. Piper, however, is defending e.l.f. shares on the weakness. While the credit card data are disappointing, the company’s higher-growth digital, international, and Naturium could more than offset and lead to a Q2 beat, contends Piper. The firm sees a good buying opportunity and reiterates an Overweight rating on the shares with a $260 price target.