Elf Beauty price target lowered to $139 from $184 at Morgan Stanley

Morgan Stanley lowered the firm’s price target on Elf Beauty to $139 from $184 and keeps an Equal Weight rating on the shares. The recent sharp pullback in the stock “looks a bit overdone,” with the market not pricing in enough long-term growth, argues the analyst. However, when considering the question “Is This a Buying Opportunity?” the firm says it is “getting closer but we don’t see enough visibility to turn positive yet” given that a U.S. scanner data slowdown is “real” and weaker quality is “disconcerting,” even when considering robust international and e-commerce growth that it still thinks should drive short-term upside. The firm’s lowered target is based upon a lower multiple to reflect the slowdown in beauty category sales growth and Elf’s U.S. scanner sales, the analyst tells investors.