Investors in Oddity Tech Ltd., the beauty company behind the brands SpoiledChild and Il Makiage, will soon get a look at how Wall Street views the latest consumer company to go public amid a resurgence of US listings.
Shares of the company have surged about 48% since its July trading debut, making it a standout initial public offering in 2023. The company raised $424 million alongside founder and backer L Catterton. Oddity also counts money managers Baillie Gifford and Franklin Templeton as cornerstone investors.
A favorable review from analysts could drive another leg higher for the company which was underwritten by banks including Goldman Sachs Group Inc., Morgan Stanley, Allen & Company, BofA Securities, Barclays Capital, Truist Securities, JMP Securities and KeyBanc Capital Markets Inc.
The so-called quiet period for ratings from analysts at firms that participated in Oddity’s IPO ends Aug. 14.
“The valuation is a little bit disconnected from fundamentals,” said David Trainer, chief executive officer of New Constructs, adding that the stock’s price signals expectations for the company are extremely high.
Oddity has a market value approaching $3 billion, while Sally Beauty Holdings is valued at about $1.2 billion, according to data compiled by Bloomberg.
The stock’s debut followed a string of consumer companies going public, including Cava Group Inc., Savers Value Village Inc. and Johnson & Johnson spinoff Kenvue Inc. The listings signal momentum is back in the IPO market amid an equities rebound after a lull at the start of the year.
Read ECM Watch: Oddity’s Debut Surge Is an Encouraging Sign for IPOs
Analysts at underwriting banks often start their coverage on favorable terms. Savers Value Village was no exception, the company now boasts eight buy ratings and no holds or sells, according to data compiled by Bloomberg.
Meanwhile Cava — which has surged more than 118% since going public — has accrued six buy ratings, three holds and no sells from analysts covering the restaurant chain. The fast-casual restaurant chain notched an 11% bump when its quiet period expired in July.
Of course, not all of this year’s IPOs have been able to hold onto early gains after a wave of analyst initiations. Kenvue shares fell 2.2% when underwriting banks initiated on the company in May they were largely neutral. The stock has fallen over 6% since then.