What Happened?
Shares of hair care company Olaplex (NASDAQ: OLPX) jumped 15.4% in the morning session after Canaccord Genuity upgraded the stock to Buy from Hold and raised its price target to $2.00 from $1.50. The research firm cited brand reinvigoration and a potential return to growth as key reasons for the more optimistic stance. Canaccord Genuity noted that after a difficult period following its IPO, the prestige beauty brand is finally seeing its sales and margins stabilize. The firm believes that investments in marketing, merchandising, and innovation are beginning to yield positive results. Supporting this view, Olaplex's second-quarter sales showed a return to growth, with analysts seeing the potential for positive sales growth in fiscal year 2025. The company's revenue growth was recorded at 2.25% as of June 30, 2025.
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What Is The Market Telling Us
Olaplex’s shares are extremely volatile and have had 48 moves greater than 5% over the last year. But moves this big are rare even for Olaplex and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 11 days ago when the stock dropped 3.8% on the news that markets pulled back amid hotter-than-expected inflation data. The main concern for investors was the July Producer Price Index (PPI), a measure of wholesale inflation. The higher-than-expected reading suggests that companies could face squeezed profit margins due to rising costs. This also reduces the likelihood of the Federal Reserve cutting interest rates, which could further dampen economic activity. Compounding these inflation fears are multiple reports signaling a weakening consumer.
Olaplex is down 5% since the beginning of the year, and at $1.61 per share, it is trading 38.7% below its 52-week high of $2.62 from September 2024. Investors who bought $1,000 worth of Olaplex’s shares at the IPO in September 2021 would now be looking at an investment worth $65.51.
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