** Shares of Elf Beauty ELF.N up 2% at $95.50 premarket

** Citigroup initiates coverage with a "buy" rating and sets PT at $110, representing 17.5% upside to stock's last close

** Broker cites strong growth runway, forecasting +16% annual pace of revenue growth over the next three years

** Acquisition of Hailey Bieber-founded Rhode expected to add ~$200 mln to FY26 sales

** Citi flags recent ~35% stock pullback post-Q2,

driven by shipment pause, cycling distribution gains as an attractive entry point

** Pricing actions are expected to add about $150 mln gross income over FY26–27, helping offset tariff costs

** As of last close, ELF stock fell 19.7% over the past year

(Reporting by Tharuniyaa Lakshmi in Bengaluru)

((tharuniyaa@thomsonreuters.com))