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Piper Sandler maintains overweight on Sally Beauty stock

EditorAhmed Abdulazez Abdulkadir
Published 04/12/2024, 01:30 am
OLPX
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Tuesday, Piper Sandler reiterated its Overweight rating on Sally Beauty Holdings (NYSE:NYSE:SBH) with a stable $17.00 price target. The firm's analyst highlighted the company's appealing valuation and the sustained positive comparable sales that are expected to bolster the stock.

The endorsement comes after a comprehensive quarterly hair salon survey, which included feedback from 107 stylists across the United States and Canada. For deeper insights into analyst ratings and valuations, InvestingPro subscribers can access comprehensive research reports covering 1,400+ US stocks.

The analyst commended Sally Beauty Holdings for its continued attractive setup, citing limited risk factors and a consistent performance that should support the company's share value. The survey's findings suggest that the beauty retailer's strategies are resonating well within the industry, contributing to its positive outlook.

Conversely, the analyst maintained a Neutral rating on Olaplex (NYSE:OLPX) with a $1.50 price target, placing it at the lower end of analyst targets ranging from $1.50 to $5.00. Despite positive brand perception and innovation efforts in the U.S., concerns were raised regarding marketing and international challenges.

These issues were previously discussed during the company's third-quarter earnings call, where the company reported impressive gross margins of 71.8% despite a 9.2% revenue decline. The analyst advised that these uncertainties merit caution and a period of observation before making further assessments.

The analyst's statement emphasized the importance of Sally Beauty Holdings' consistent positive comparable sales, which form a critical basis for the Overweight rating. "With an attractive valuation and limited risk to the consistent positive comps that should support shares, the setup for SBH continues to look attractive," the analyst noted.

In summary, while Sally Beauty Holdings is poised to maintain its momentum, Olaplex faces ongoing challenges that warrant a more reserved outlook. According to InvestingPro data, OLPX shows high stock volatility with a beta of 2.47, though the company maintains strong liquidity with current assets well exceeding short-term obligations.

Piper Sandler's position reflects a careful consideration of the market dynamics and individual company performances as indicated by their respective ratings and price targets. For a complete analysis of OLPX's financial health and additional ProTips, investors can access the detailed Pro Research Report.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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