What Happened?
A number of stocks jumped in the afternoon session after the major indices rebounded (Nasdaq +2.0%, S&P 500 +1.5%) as President Trump postponed the planned 50% tariff on European Union imports, shifting the start date to July 9, 2025.
Companies with substantial business ties to Europe likely had some relief as the delay reduced near-term cost pressures and preserved cross-border demand.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.
Among others, the following stocks were impacted:
- Sit-Down Dining company Dine Brands (NYSE:DIN) jumped 5.2%. Is now the time to buy Dine Brands? Access our full analysis report here, it’s free.
- Shelf-Stable Food company Hain Celestial (NASDAQ:HAIN) jumped 5.9%. Is now the time to buy Hain Celestial? Access our full analysis report here, it’s free.
- Personal Care company e.l.f. Beauty (NYSE:ELF) jumped 6.2%. Is now the time to buy e.l.f. Beauty? Access our full analysis report here, it’s free.
- Apparel and Accessories company PVH (NYSE:PVH) jumped 5.2%. Is now the time to buy PVH? Access our full analysis report here, it’s free.
- Broadcasting company iHeartMedia (NASDAQ:IHRT) jumped 5.1%. Is now the time to buy iHeartMedia? Access our full analysis report here, it’s free.
Zooming In On e.l.f. Beauty (ELF)
e.l.f. Beauty’s shares are extremely volatile and have had 50 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 27.4% on the news that the company reported disappointing fourth-quarter results. Its EPS and EBITDA missed. Due to weak demand trends observed earlier in the year, it lowered its full-year revenue, EPS, and EBITDA guidance, sending shares lower.
On the other hand, e.l.f. Beauty blew past analysts' revenue expectations, but markets are forward looking, and likely raised concerns about the revised growth forecast.
Overall, this was a weak quarter. Following the results, Morgan Stanley downgraded the stock from Buy to Hold adding "We are downgrading ELF to Equal-weight post Q3 results last night, which were overshadowed by ELF lowering implied Q4 guidance significantly, confirming January US scanner data weakness."
e.l.f. Beauty is down 27.3% since the beginning of the year, and at $89.43 per share, it is trading 59% below its 52-week high of $218 from June 2024. Investors who bought $1,000 worth of e.l.f. Beauty’s shares 5 years ago would now be looking at an investment worth $5,169.
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