HELE: Cost Controls And Diversified Portfolio Will Support Future Upside Potential

Analysts have trimmed their price target on Helen of Troy by $2 to $27, reflecting more cautious expectations for the shares while maintaining a neutral stance on the stock.

Analyst Commentary

Analysts describe the revised price target as a recalibration rather than a fundamental change in their view of Helen of Troy, signaling expectations for more modest upside as the company navigates a mixed operating environment.

They emphasize that the Neutral rating reflects a balance between the company’s execution track record and lingering questions around the durability of its growth and margin profile.

Bullish Takeaways

• Bullish analysts note that the lower price target still implies some upside from current trading levels, suggesting the shares are not viewed as significantly overvalued at this stage.
• They highlight the company’s diversified product portfolio as a buffer against category specific volatility, which supports a more stable earnings outlook over the medium term.
• Execution on cost controls and efficiency initiatives is seen as a potential driver of incremental margin improvement, providing room for earnings stabilization even if top line growth remains muted.
• Recent adjustments to expectations are viewed as bringing forecasts closer to achievable levels, which could reduce the risk of future estimate cuts and help rebuild investor confidence over time.

Bearish Takeaways

• Bearish analysts point to the price target reduction as an acknowledgment that prior growth and margin assumptions were too optimistic, indicating more tempered expectations for value creation.
• They remain cautious about the company’s ability to accelerate organic revenue growth in a competitive and promotional retail environment, which may constrain multiple expansion.
• Concerns persist that ongoing investments in brand support and innovation could pressure near term profitability, limiting the pace of earnings recovery.
• The Neutral stance is viewed by some as a signal that risk and reward are currently balanced, with limited catalysts visible to drive a meaningful re rating in the short term.

What's in the News

• Revlon Hair Tools, part of Helen of Troy's beauty portfolio, launched the One-Step Multi-Styler, a 3-in-1 styling tool with interchangeable attachments aimed at delivering salon-quality results at home at an accessible price point (Key Developments).
• The One-Step Multi-Styler features tangle-free bristles to reduce hair breakage, professional ceramic technology for added shine and heat protection, multiple temperature settings, and a travel-friendly design with compact attachments and a swivel cord (Key Developments).
• Helen of Troy issued fiscal 2026 third quarter guidance calling for net sales of $491 million to $512 million, implying a 7.5% to 3.5% decline year over year, and GAAP diluted EPS of $1.85 to $2.05 (Key Developments).
• For full year fiscal 2026, the company guided to consolidated net sales of $1.739 billion to $1.780 billion, implying a decline of 8.8% to 6.7%, and projected a GAAP diluted loss per share of $29.90 to $29.40 (Key Developments).
• Helen of Troy reported no share repurchases between June 1, 2025 and August 31, 2025, leaving the buyback program announced on September 5, 2024 effectively unused to date (Key Developments).

Valuation Changes

• Fair Value: Unchanged at approximately $29.33 per share, indicating no revision to the intrinsic value estimate.
• Discount Rate: Steady at 12.5%, signaling no change in the assumed risk profile or required return.
• Revenue Growth: Effectively unchanged at about 0.65%, with only an immaterial rounding adjustment.
• Net Profit Margin: Stable at roughly 7.43%, reflecting no meaningful shift in long term profitability assumptions.
• Future P/E: Maintained at about 6.96x, suggesting no revision to the valuation multiple applied to forward earnings.