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Chart analysis E.l.f. Beauty: Cosmetics giant flying high

E.l.f. Beauty (ISIN: US26856L1035) presented impressive figures in the last quarter. Sales rose by 3.58% to USD 332.6 million, while EPS of USD 0.50 per share was significantly higher than the previous year's USD 0.26. Growth is driven by a strong market position and innovative products. In particular, the acquisition of the prestige beauty brand Rhode for USD 1 billion could open up new opportunities. Rhode recently generated sales of USD 212 million and is expected to grow further through expansion into Sephora and Uta stores. But there are risks: The increased tariffs on Chinese imports of up to 55% could weigh on margins. E.l.f. Beauty is responding with a global price increase and a diversified supply chain. Nevertheless, around 80% of production currently takes place in China.

From a technical chart perspective, E.l.f. Beauty was able to gain significantly in value after the announcement of the quarterly figures and the Rhode takeover and take a decisive step forward. The downward trend from the all-time high was sustainably broken upwards and an overriding (upward) trend continuation signal was generated. The share had previously undergone an 80% correction in which the overbought situation was reduced. Due to the price increase, a first buy signal was generated in the slow stochastics and confirms the trend continuation signal. As long as the share can sustainably hold above USD 95, the next price targets are USD 148, followed by USD 225 and USD 500. If the share falls significantly below USD 95, the next correction target is USD 62.

Preferred scenario: Long-term long entry in the USD 98 range. Hedging below USD 60.

https://mobile.aktien-mag.de/blog/chartanalysen/chartanalyse-e-l-f-beauty-kosmetikriese-im-hohenflug/id-144953

mobile.aktien-mag.deChartanalyse E.l.f. Beauty: Kosmetikriese im Höhenflug

15 Comments

Chris@Multibagger

I do not share this opinion in the short term. The share has gained over 80% within a month. Examples that have also performed like this in the not too distant past include $HIMS and $HOOD. I sold both after the 80%. Of course I'm more of a technical trader, so it's a different approach. But I think that we will first see a correction before attacking further price targets of $140, $200 or $400. I assume that Rhode also manufactures in China. In my opinion, neither of them have such market power that they can pass on tariffs in the form of unlimited price increases. For me personally, such sharp rises generally call for a short-term short attempt in trading terms.

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Tenbagger2024@Tenbagger2024

@Multibagger
That's where 🍊 comes into play again, of course.

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Sansebastian@Sansebastian

@Multibagger The share has already undergone an almost 80% correction. Why should there be another correction?

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Chris@Multibagger

@Sansebastian because it rose 130% in 6 weeks after the correction from the low of € 43 on April 16, i.e. much faster than the downward correction. Because the synergies with Rhode will only become apparent later. Because the purchase price of Rhode is 1 billion dollars, even if it is not due immediately, it is a burden on the result. And above all, because I believe in the 🎃 Man. He will announce new tariffs on China in the near future.
In my opinion, these points are enough for a 15-20% correction to around 80$. But my bad luck is that there are no interesting short products with decent leverage.

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Chris@Multibagger

@Multibagger the only product I have found is a factor 3 short from MS. Maybe I'll take that.

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Sansebastian@Sansebastian

@Multibagger ah ok, then even a 30% correction would be "healthy". But we'll see if it turns out that way

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Stulle 🥪@Stullen-Portfolio

Well, that could be something like a path!

Greetings
🥪

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Tenbagger2024@Tenbagger2024

@Stullen-Portfolio
Oh yes, according to @BamBamInvest for sure

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BamBamInvest@BamBamInvest

@Tenbagger2024 Short is never the way for me! 😁 But a correction would be another way to accumulate

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Chris@Multibagger

@BamBamInvest I think @Tenbagger2024 meant rather the statement with that could be the way, which did not refer to my short idea. 😉😂

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BamBamInvest@BamBamInvest

@Multibagger You are right, the share price has risen quite sharply now and we are also in the overbought RSI 87 area, which could create headwinds in the short term with Trump/China/tariffs and a certain correction would not be a bad thing either. However, I expect the positive news and the $ULTA figures to provide a further tailwind, especially as the cosmetics sector is not usually so cyclical. But of course if the market as a whole corrects, $ELF will not remain unscathed. However, they have been punished excessively and, in my opinion, can pass on the tariffs in their low-price segment through the brand. It remains exciting, but I believe that they will do quite well due to the current situation, even if there is a correction. Would be cautious here with a short ✌️gibt better options for this, as the price increase can probably also be explained by the reduction in short positions after the figures.

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Chris@Multibagger

@BamBamInvest we will see, I will watch for another 1-2 days to see whether they rise above around $115 on a closing price basis or continue to
bounce off. If they fail, I will venture a short with a factor of 3. Unfortunately, there is nothing better. I would prefer a KO at USD 120.

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BamBamInvest@BamBamInvest

@Multibagger now also depends heavily on the overall market, let's see what musk says. $UNH has investor day tomorrow and I think also announces dividend increase, could now go up again in the short term without bad news

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Chris@Multibagger

@BamBamInvest Of course, I also have an entry scenario for them. At 325$ is the upper end of the last trading range, if they go through it, a long is possible. If they bounce off, it can also go back down to 290, i.e. short. Yes, it's not easy to be a successful trader 😉😂 But I love it.

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BamBamInvest@BamBamInvest

@Multibagger yes, they are also struggling with the 300$ at the moment, but unless there is negative news, we are quite oversold. And over the last few days, they've always resisted the red market. Remains exciting ✌️

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