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Deutsche Bank has downgraded e.l.f. Beauty to a Hold rating from Buy, saying the stock’s big rally has left little room for more short-term gains. The bank raised its price target to 128 dollars from 121, pointing to growth opportunities in both the e.l.f. and Rhode brands, especially overseas.

The caution comes after shares jumped about 25 percent since early August. At current levels, the stock trades around 35 times expected 2025 earnings and 20 times expected EBITDA, which Deutsche Bank says makes the risk and reward more evenly balanced.

Signs of slowing sales growth also played a role. U.S. sales rose 13 percent in August on a two-year basis, down from 19 percent in July. That makes it harder to see near-term revenue surprises. The bank’s forecast for third-quarter revenue is 367 million dollars, in line with consensus, while its profit estimates are slightly below Wall Street’s.

Reputational issues have added another layer of risk. A recent ad campaign in mid-August sparked online backlash and boycott calls, which the company admitted had “missed the mark.” Rhode, its skincare brand, also faced criticism for featuring a Russian model in its marketing. Deutsche Bank said it’s still unclear if this will dent sales, but it does add uncertainty.

The firm expects any reinstated guidance from e.l.f. to be conservative, given slower demand trends, unsettled trade policies, and brand perception challenges.

Over the longer term, Deutsche Bank remains positive on the company’s growth prospects. But with shares already pricing in much of the near-term upside, it sees limited room for more gains right now.