Sally Beauty stock price target raised to $19 from $15 at Canaccord

Canaccord Genuity raised its price target on Sally Beauty Holdings (SBH) to $19.00 from $15.00, maintaining a Buy rating, following recent meetings with management and strong Q3 2025 earnings that surpassed analyst expectations. The firm cited SBH's robust fundamentals, progress in strategic execution, and multiple growth opportunities, including product innovation and new store formats. Despite a ~50% stock appreciation, Canaccord views the valuation as compelling at approximately 7x fiscal year 2027 earnings estimates, suggesting continued upside potential compared to industry peers.

Analysis

Analyst sentiment for Sally Beauty Holdings is increasingly positive, evidenced by Canaccord Genuity raising its price target to $19.00 from $15.00 while maintaining a Buy rating. This upgrade is underpinned by a strong third-quarter 2025 earnings report, where the company delivered an EPS of $0.51, surpassing the $0.43 consensus by 18.6%, and revenue of $933 million, which also beat forecasts. Critically, the reported 1.0% sales decline and 0.4% comparable sales decline were better than both analyst estimates and company guidance, suggesting operational stabilization and effective execution of management's strategic priorities. The company's financial health is robust, with gross margins at 51.39% and a current ratio of 2.41. Despite a significant 50% appreciation in the stock price since its last earnings report, Canaccord highlights a compelling valuation at approximately 7x fiscal year 2027 earnings estimates, which represents a notable discount to specialty retail peers trading at high single-digit to low-teens multiples.

Key Decisions for Investors

• Given the strong earnings beat, multiple analyst price target upgrades, and a valuation discount relative to peers, investors could view the current price as an attractive entry point for a long position.
• Investors should closely monitor management's continued execution on its strategic initiatives, particularly comparable sales trends and gross margin performance in upcoming quarters, as these are critical to closing the valuation gap.
• Consider SBH as a potential relative value play within the specialty retail sector, as the current multiple of approximately 7x FY27 earnings presents a significant discount to peers that could narrow if operational momentum is sustained.