There Is Some Light At The End Of The Tunnel - Here's Why Analyst Remains Bullish On This Beauty Company - Olaplex Hldgs (NASDAQ:OLPX)

Truist Securities analyst Bill Chappell reiterated a Buy rating on the shares of Olaplex Holdings, Inc. OLPX with a price target of $15.
The analyst's key takeaways from meetings with management include the following: the brand remains strong with a solid performance from recent dry shampoo launch despite negative headlines and a better understanding of plans to step up marketing and partner engagement in 2023.
A lawsuit representing 70 women was filed against the company on February 9, claiming that OLPX's products caused hair loss.
The analyst has found dozens of testimonials from stylists and consumers online refuting the accusations and singing the praises of the product.
The analyst believes the lawsuit is not fatal and will not create a long-term impairment of the brand.
Beyond the fact that dry shampoo is a new segment for the company, which could become a meaningful revenue stream, the analyst also views it as a testament to the brand.
If there were prevalent concerns about the safety of the products, the analyst would have expected it to impact new product launches.
Management clearly acknowledged that the suit/headlines would impact the business in the near term.
The analyst believes the guidance and the current stock price more than factor in that impact.
The analyst believes the shares are one of the most compelling from a risk/reward standpoint in 2023 based on the solid margins/profitability, patented technology, and highly loyal existing base.
Price Action: OLPX shares are trading higher by 1.80% at $3.94 on the last check Monday.

Market News and Data brought to you by Benzinga APIs