This Beauty Stock Slipped Today After A Deutsche Bank Downgrade Citing Lofty Valuation – Find Out More

Deutsche Bank downgraded the cosmetics maker to ‘Hold’ from ‘Buy’ but raised its price target on the stock to $128 from $121.

Elf Beauty (ELF) shares fell nearly 2% in early trading on Tuesday after Deutsche Bank downgraded the cosmetics maker to ‘Hold’ from ‘Buy’, citing its strong valuation after a rally.

Deutsche Bank, however, raised its price target to $128 from $121, according to TheFly. The firm noted that the shares were up 150% from their April low. The firm added that recent consumption trends suggest a lack of upside to consensus estimates, while commentary on Elf's social media channels has become increasingly critical.

Retail sentiment on Elf Beauty remained unchanged in the ‘neutral’ territory, with message volumes at ‘normal’ levels, according to data from Stocktwits.

ELF sentiment and message volume September 2, 2025, as of 9:50 am ET | Source: Stocktwits

Elf Beauty is known for its affordable cosmetics and beauty products, which start at just $2. The company announced last month that it had raised prices on its products by $1, effective August 1, to mitigate the impact of U.S. President Donald Trump’s tariffs, primarily on Asian countries.

The company’s second-quarter net income declined by 30% to $33.3 million, also due to increased tariffs on imports from China. Elf Beauty has tried to reduce its reliance on China production, which makes about 75% of its items.

A bullish user on Stocktwits noted that Elf Beauty was the “best of value company” as people are going to keep buying their products.

Elf Beauty’s stock fell over 2% this year and declined nearly 18% in the last 12 months.

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