Canaccord Genuity has increased its 12-month price target for Sally Beauty Holdings (NYSE:SBH) to $20.00 from $19.00 while retaining a Buy rating after the company's first-quarter fiscal 2026 report. The new target matches the analyst high in InvestingPro and arrives as SBH trades at a price-to-earnings ratio of 9.19, noted by the firm as modest relative to the company’s near-term earnings growth potential.
Sally Beauty posted 0.6% year-over-year sales growth on February 9, outpacing both Canaccord’s internal estimate of 0.1% and the consensus projection of 0.2%. Comparable-store sales were essentially flat, consistent with the company’s guidance calling for approximately flat comps.
The firm highlighted margin performance as a key constructive element in its view. Adjusted EBIT margins reached 8.5%, exceeding analyst expectations in the 8.3% to 8.4% range. Canaccord attributed part of the margin improvement to the company’s "Fuel for Growth" strategy.
At the segment level, Sally Beauty Supply delivered comparable sales up 0.1%, while Beauty Systems Group recorded a 0.2% decline in comps. Canaccord also drew attention to management’s expansion of its store remodel initiative - the program is being increased from 38 refreshed locations to 80 by the end of fiscal year 2026, with additional opportunities identified for fiscal 2027.
Based on the combination of the recent operational results and the enlarged remodel plan, Canaccord expressed confidence that continued execution of the strategy could support further growth and provide upside if the refreshed stores drive stronger customer engagement. This outlook underpinned the decision to nudge the price target higher while maintaining the Buy recommendation.
Market performance has been notable: SBH has returned 77.64% over the past year and 45.55% over the last six months. According to InvestingPro, the stock is assessed as slightly undervalued on a Fair Value basis.
In the company’s reported first-quarter results for fiscal year 2026, adjusted earnings per share came in at $0.48, ahead of the $0.46 analysts had forecast. Revenue totaled $943 million, surpassing the expected $939.63 million. Despite the beat on both EPS and revenue, the stock experienced a small pre-market decline following the release.
These reported figures and management updates paint a picture of a company delivering modest top-line growth, improving margins and proactive capital allocation toward store refreshes. How those refreshed locations perform in driving comp growth will be a focal point for investors as the remodel rollout expands.
The InvestingPro platform offers a Pro Research Report and additional analyst tips for SBH for subscribers seeking deeper analysis.