Over the past few years, E.l.f. Beauty has built one of the fastest-growing portfolios in cosmetics, expanding beyond its namesake (Eyes, Lips, Face) value-focused makeup brand into skin care and prestige beauty.
And its biggest recent bet was Rhode, the skin care and cosmetics brand founded by Hailey Bieber, which E.l.f. agreed to acquire in 2025 for up to $1 billion.
The bet is now paying off, with Rhode becoming an increasingly important part of the company’s beauty growth story.
It comes at a crucial time for the affordable beauty brand as it prepares for a major expansion across Europe.
Analyst Anna Lizzul of Bank of America is also bullish and has raised the firm’s price objective on E.l.f. Beauty to $118 from $100, reiterating a Buy rating.
In a note shared with TheStreet, Lizzul cited higher expectations for Rhode ahead of this rollout.
BofA raises expectations for Rhode
BofA estimates that Rhode’s upcoming expansion into Sephora Europe could eventually generate $150 million to $200 million in annual sales from the region.
Rhode is scheduled to launch on Sept. 30 across 19 European countries and about 500 Sephora stores, representing a majority of the roughly 800 potential Sephora locations in the region.
This expansion will bring Rhode’s presence to approximately 40% of Sephora stores globally, according to BofA.
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The firm also expects Sephora to overtake Amazon in E.l.f. ‘s retail sales following the European rollout.
This will make Sephora the company’s third-largest retail partner, following Target and Walmart.
BofA also substantially increased its Rhode forecasts ahead of the European launch.
The firm now expects Rhode to generate $601 million in fiscal 2027 sales, up from its previous estimate of $550 million.
It also raised:
- Second-quarter Rhode sales estimate to $146 million from $130 million
- Third-quarter estimate to $160 million from $141 million
- Fourth-quarter forecast to $136 million from $119 million
Those higher expectations pushed BofA’s fiscal 2027 adjusted EBITDA forecast for E.l.f. Beauty to $420 million from $405 million, above the company’s own current guidance of $401 million to $407 million.
BofA also increased its fiscal 2027 adjusted earnings estimate to $3.83 per share from $3.64, and raised its estimates for fiscal 2028 and fiscal 2029.
The company itself has already become more optimistic about fiscal 2027.
E.l.f. Beauty raised its full-year net-sales growth forecast in August to 18% to 20% from 12% to 14%, putting expected revenue between $1.938 billion and $1.968 billion.
First-quarter net sales jumped 36% to $479.4 million, marking the company’s 30th consecutive quarter of sales growth.
Rhode becomes bigger part of E.l.f. Beauty
E.l.f. Beauty acquired Rhode in 2025 to broaden its portfolio beyond its core mass-market cosmetics business.
The acquisition included $800 million in upfront consideration, consisting of $600 million in cash and $200 million in stock, plus an additional $200 million earnout tied to Rhode’s future growth.
BofA said Rhode has already demonstrated unusually strong demand.
The brand generated $27 million in direct-to-consumer sales in a single day from the launch of its June summer collection and added about 90,000 new customers.
More than 70% of purchases during the launch came from existing customers, according to the firm.
That momentum is particularly important as Rhode pushes further outside the U.S. About 20% of Rhode’s business currently comes from international direct-to-consumer sales, while more than 70% of the brand’s social-media following is outside the U.S., according to BofA.
The firm sees that imbalance as evidence that Rhode remains underpenetrated internationally.
BofA said Rhode’s previous Sephora expansion has also produced strong results, with the brand maintaining the No. 1 position for productivity at the retailer since its retail launch.
E.l.f. Beauty makes another international push
Rhode’s European expansion is part of a broader effort by E.l.f. Beauty to reduce its reliance on the U.S. market alone.
Its entry into Brazil on Sept. 29 will be exclusive to Sephora, making it the first mass color cosmetics brand carried by Sephora Brazil.
“We’ve taken the time to understand what makes Brazilian consumers unique, and we’re excited to bring the best of e.l.f. to every eye, lip, and face without compromise,” said E.l.f. Brands President Kory Marchisotto.
E.l.f. Beauty said international sales penetration across its brands has doubled over the past five years to 21% of net sales.
The company is building on its performance in Mexico, where E.l.f. Cosmetics has become Sephora’s No. 1 cosmetics brand.
Sephora Brazil, which reaches roughly 17% of Brazil’s population, will give E.l.f. a large platform to introduce the brand in another major beauty market.
However, BofA still sees more room for international growth.
E.l.f. currently generates just over 20% of sales internationally, compared with more than 70% for some larger beauty companies, according to the firm.
Wall Street bullish on E.l.f. Beauty
BofA is not alone in raising its expectations for the beauty company.
B. Riley raised its price target on E.l.f. Beauty to $115 from $100 while maintaining a Buy rating.
The firm pointed to momentum behind Rhode’s limited-edition collaboration with Alexandra Leclerc, with several products already sold out ahead of the Sept. 30 Sephora Europe launch.
B. Riley said the expansion into 19 additional countries could broaden Rhode’s reach, particularly given Leclerc’s European fan base.
BofA, meanwhile, sees Rhode as only one part of E.l.f.’s potential growth.
The firm also highlighted E.l.f.’s expansion into hair care as another potential long-term growth engine.
E.l.f. launched six hair-care products this summer, all priced at $10 or less, initially through TikTok Shop and the company’s website before entering Target stores.
BofA estimates the hair care market at $17 billion in the U.S. and said the category grew 9% year over year in the first quarter of 2026, outpacing the broader beauty industry.
BofA believes E.l.f.’s hair care business could eventually reach a scale similar to E.l.f. Skin.
The company also has room to increase distribution at retailers, including Walmart and Ulta Beauty.
Still, Rhode represents the more immediate catalyst.
With Rhode preparing to enter hundreds of additional Sephora stores in Europe and E.l.f. Cosmetics moving into Brazil, the next thing to watch is whether E.l.f. Beauty can turn its growing international footprint into the next major leg of its expansion.
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