The SMID Point

Research evidence excerpt

The SMID Point

California Resources Corporation (CRC.N) - Model Update

We update our model for recent commodity prices, our Commodity Team’s new

forecasts, and other modelling tweaks. Notably, the recent fall in Brent prices has

lowered our forecast for both revenue and hedge losses, and we trim our 2q

EBITDAX forecast by 11% to $397mm and our FY’27 EBITDAX forecast by ~16% to

$1.36bn. We lift our DACF multiple to ~5x (up from ~4.6x) due to lower oil prices,

resulting in an E&P valuation of $45/sh. Combined with $9/sh for Power, $9/sh

for CCUS, and $7/sh for real estate, we arrive at a target price of $70.

Buy | Target price US$70.00

Scott Gruber

Bull/Bear: California Resources Corporation

e.l.f. Beauty Inc (ELF.N) - Takeaways From HQ Meeting with ELF’s CEO Tarang

Amin

We hosted an investor meeting with ELF’s Chairman & CEO Tarang Amin at the

company’s HQ in Oakland, California. During the meeting, ELF discussed key

topics such as initiatives on core e.l.f., the haircare expansion, price reduction

tests, the growth opportunity at rhode, tariff refunds, and several others detailed

herein. We also explored many of these topics in our recent deep dive note. Overall,

we came away from our meeting with a greater appreciation for the initiatives the

company is undertaking to improve the core e.l.f. brand, the solid growth of

Naturium, and the large opportunity ahead for rhode. Net, we continue to see a

solid topline growth acceleration for the total company with potential upside to

conservative guidance, driven by rhode, Naturium, and an expected improvement

in core brand e.l.f. driven by selective price reductions, innovation in core

categories, and expansion in haircare. Hence, we reiterate our Buy rating.

Buy | Target price US$87.00

Filippo Falorni, CFA

Bull/Bear: e.l.f.