Piper sees e.l.f. Beauty buying opportunity from index reconstitution

Piper Sandler says that on June 28, e.l.f. Beauty will be moving from the Russell 2000 to the Russell 1000 as part of the Russell U.S. index reconstitution. This could be a significant liquidity event for e.l.f., but with some pre-positioning already occurring, “any negative movement should be minimized and short-lived,” the analyst tells investors in a research note. Further, the firm continues to see a strong fundamental backdrop for the company and thinks “there’s significant upside to be had, particularly coming from the international business.” As such, Piper would be buyers on any weakness from the Russell reconstitution and keeps an Overweight rating on e.l.f. Beauty with a $210 price target.