Adore Beauty's 1H revenue and earnings (EBITDA) were beats against forecasts by consensus, according to Morgan Stanley, with sales growth accelerating into both the second and third quarters.

Management reiterated FY24 earnings margin guidance, supported by an expanding gross margin percentage, notes the broker. The gross margin increased by 1.1percentage points to 33.5% in the 1H compared to the 33% forecast by consensus.

Less positively, the analyst points out sales growth is still below pre-covid trends and industry growth.

Equal-weight. Target $1.15. Industry view: In-Line.

Sector: No Sector.

Target price is $1.15.Current Price is $1.27. Difference: ($0.12) - (brackets indicate current price is over target). If ABY meets the Morgan Stanley target it will return approximately -10% (excluding dividends, fees and charges - negative figures indicate an expected loss).

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