Elf Beauty Stock Upgraded by Bernstein on Strong Hair Care Launch

Elf Beauty, Inc. (ELF) shares rose Wednesday after analysts at Bernstein upgraded the stock to Outperform from Market-Perform and nearly doubled their price target to $113 from a previous $60. The firm cited a robust start for the company's recent expansion into the hair care market as the primary driver for the more bullish outlook.

Strong Start in a New Category

Bernstein's upgrade is based on strong initial sales data for Elf's hair care line, which launched in June 2026. Citing Nielsen data, the analysts noted that the new products accounted for an average of 2.8% of the company's total tracked sales in the first three weeks post-launch.

The launch represents Elf's largest category expansion since it introduced e.l.f. SKIN in 2022. The six-product assortment, priced between $6 and $10, was rolled out first on TikTok Shop and the company's website before arriving in Target stores in July.

Sizing the Market Opportunity

Analysts at the firm emphasized the strategic importance of the move, calling hair care "the largest white-space opportunity within beauty for e.l.f." The category represents a $13.4 billion market in Nielsen-tracked U.S. retail sales, significantly larger than the skin care market at $5.9 billion.

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Using the successful trajectory of e.l.f. SKIN as a benchmark, which more than doubled its market share between 2022 and 2026, Bernstein projects a significant long-term upside. The firm estimates that Elf could capture approximately 0.9% of the hair care market by 2029, which would generate an estimated $210 million in fully incremental annual net sales.

Revised Financial Outlook

To reflect the potential contribution from the new division, Bernstein increased its earnings per share (EPS) growth forecasts for Elf. The firm now projects 5% growth for the next twelve months (up from 2%) and 14% for the following year (up from 7%), placing its estimate roughly 2% above the Wall Street consensus for that period.

In line with the raised expectations, Bernstein also lifted its target valuation multiple on the stock to 30 times from 17 times. The analysts attributed this to both the stock's recent re-rating and expectations for further multiple expansion as growth from the new category materializes.