By Sam Boughedda
Shares of Olaplex Holdings Inc (NASDAQ:OLPX) were downgraded to Neutral today from Overweight, with the price target cut to $12 from $19 per share at Piper Sandler on Thursday.
Analysts said the downgrade comes "as a result of further work following our September Quarterly Salon Survey revealed that competition and misinformation pose growing risks to the company."
According to them, calls to 150 hair salons across the top 50 MSAs in the U.S. suggest Olaplex could be losing a mid-to-high single-digit % of share in salons, while other hair repair brands like K18 are rising in turn.
"We still think good growth is ahead for OLPX, but we anticipate increased investments in marketing and education are needed to offset the headwinds. When factoring in our now lower forward estimates on both the top and bottom lines, we see little room for valuation upside given the risks at play," the analysts added.
Shares of Olaplex are down over 10% Thursday.