Analyst Oliver Chen from TD Cowen maintained a Hold rating on Beauty Health (SKIN – Research Report) and increased the price target to $2.00 from $1.50.
Oliver Chen has given his Hold rating due to a combination of factors impacting Beauty Health’s current and future performance. The company’s first-quarter sales showed a decline, although not as severe as anticipated, and adjusted EBITDA exceeded expectations. However, management has expressed caution for the rest of the fiscal year, citing macroeconomic challenges and specific pressure points like the APAC region and tariffs.
Despite some progress in innovation and loyalty programs, the demand for delivery systems remains low due to high interest rates and economic uncertainty, although consumables have shown growth. While there is strong demand for certain treatments, luxury services are under pressure as consumers become more budget-conscious. Additionally, past quality issues with certain products have affected brand loyalty. The company is working on initiatives to address these challenges, but elevated leverage and tariff-related costs are ongoing concerns.