Investing.com -- Bernstein upgraded Elf Beauty to Outperform from Market-Perform and nearly doubled its price target to $113 from $60, citing a stronger-than-expected start to the company’s newly launched hair care line.

The company’s shares rose more than 2% in premarket trading Wednesday.

Elf entered the hair care category in June 2026 with a six-product assortment priced between $6 and $10, marking its largest category expansion since the launch of e.l.f. SKIN in 2022. According to Nielsen data, hair care accounted for roughly 3% of the company’s total tracked sales in the weeks following launch, averaging 2.8% over the first three weeks.

The company launched first on TikTok Shop, followed by its direct-to-consumer site and Target.com, before reaching Target stores in July.

Bernstein analysts said the opportunity is significant given the category’s scale. Hair care represents $13.4 billion in Nielsen-tracked U.S. retail sales, more than twice the size of skin care at $5.9 billion and considerably larger than fragrances at $1.5 billion, making it "the largest white-space opportunity within beauty for e.l.f," the analysts said. The category has grown at a 3.1% compound annual rate, expanding from $11.9 billion in 2022 to $13.4 billion in 2026.

The firm used e.l.f. SKIN as a benchmark for hair care’s long-term potential, noting that SKIN’s market share more than doubled from 0.6% in 2022 to 1.4% in 2026. Applying a similar trajectory, Bernstein estimates Elf could reach approximately 0.9% market share in hair care by 2029, translating to about $210 million in fully incremental annual net sales.

Bernstein raised its EPS growth forecasts to 5% and 14% for the next twelve months and the following year, respectively, up from prior estimates of 2% and 7%, to reflect expected contributions from hair care. The broker said this puts it roughly 2% above consensus on earnings per share for the year following the next twelve months.

Bernstein also raised its target multiple to 30 times from 17 times, citing both the stock’s recent re-rating and expectations for further multiple expansion as growth materializes.

"We believe e.l.f has the most relevant operating model for today’s consumer -social media fluency, rapid innovation cycles, and a viral-prone approach to new product development," the analysts wrote.