Core Viewpoint - Piper Sandler has lowered its price target for e.l.f. Beauty, Inc. to $85.00 from $100.00 while maintaining a Neutral rating, resulting in a more than 2% decline in shares on Monday [1] Group 1: Market Competition - Intensifying competition is noted as rivals regain momentum, impacting e.l.f.'s market share gains which slowed in the second quarter of fiscal 2026 but showed improvement in the third quarter due to product launches [2] - Competitors such as L'Oréal, NYX, and Maybelline are increasing their innovation efforts, raising the bar for differentiation in the market [2] Group 2: Sales Growth Estimates - The third-quarter fiscal 2026 estimate for core e.l.f. sales growth has been raised to 5%, exceeding the company's annual guidance of 3%–4% [3] - However, the fourth-quarter forecast has been lowered to a 1% decline due to challenging comparisons [3] Group 3: Valuation Metrics - The reduced price target reflects a valuation of 16x fiscal 2027 EBITDA, down from 18x previously [4] - The stock's current P/E multiple of 26x is near the midpoint of its recent 18x–35x range and may face compression if shipments continue to lag behind consumption trends into fiscal 2027 [4]

Group 1 - The timing of the recent field visit was deemed perfect for connecting with the U.S. market, which is critical for understanding consumer behavior [1] - The CEO expressed excitement about the engagement with major retailers like Walmart, Target, and SalonCentric, highlighting the importance of these interactions for the business [1] Group 2 - The CEO has a long history with the L'Oréal Group, having started 32 years ago when the subsidiary was known as Cosmair, indicating deep-rooted experience within the company [2] - The CEO's career path included significant roles in marketing and management across various divisions, showcasing a diverse background in the consumer products sector [2][3] - The transition to Chief Human Resources Officer occurred just before the economic crisis of 2008-2009, which impacted the business landscape during that period [3]

L'Oréal USA Overview - L'Oréal USA is the 1 beauty manufacturer in the U S [8, 23] - L'Oréal USA represents 27% of subsidiary sales in the North America zone [9] - Over 75% of L'Oréal USA's units are produced in North America [10] - L'Oréal USA has experienced 7X growth since 1995 [15] Market Position and Growth - L'Oréal has a 16% share of market (SOM) in the total beauty market, which is more than 2X larger than the 2 competitor [24] - The U S is the 1 beauty market in size and growth worldwide, accounting for 27% of the global market with a +5% change [38, 39] - L'Oréal is accelerating faster than the market, gaining major momentum with a +5% increase in Q3 [50, 52] Category Performance - L'Oréal's haircare is growing 3X the market rate [56] - In makeup, all of L'Oréal's CPD brands are outperforming the market year-to-date [64] - L'Oréal has a 34% share of market in mass makeup [73] Channel Strategy - E-commerce accounts for 26% of L'Oréal's business and is accelerating at +2X the market rate year-to-date [92] - B&M (Brick and Mortar) remains a priority, representing 65% of the total market [98]

Core Insights - L'Oréal is establishing one of its largest global capability centres in Hyderabad to support global technology, innovation, and research [1][2] - The initiative was discussed during a visit by L'Oréal's global board in October 2025, led by CEO Nicolas Hieronimus [2] - L'Oréal India's growth has slowed to 5% in fiscal year 2025, down from 14% the previous year, due to increased competition [3] Company Developments - The new centre in Hyderabad will be separate from existing research facilities in Mumbai and Bengaluru [1] - L'Oréal is currently seeking senior management for the Hyderabad project, including candidates from its Paris headquarters [1] - Jacques Lebel was appointed as India country manager in July 2025, succeeding Aseem Kaushik [3] Market Position - India contributes just over 1% of L'Oréal's annual sales, which exceed Rs41 billion ($462 million), making it the 15th-largest market for the company [4] - L'Oréal aims to elevate India into its top ten markets, projecting annual revenue of Rs1 billion in the coming years [4] - The company holds an 8% share of India's face-care market [3] Strategic Acquisitions - In October 2025, L'Oréal acquired Kering's beauty business for €4 billion ($4.65 billion), which includes the House of Creed and beauty licenses for Kering's luxury brands [4][5] - The acquisition grants L'Oréal a 50-year exclusive license to create and distribute fragrance and beauty products for Gucci after the current agreement with Coty ends [5]