- Anna Lizzul started covering consumer and beauty products for Bank of America in 2022.
- This month she was named one of Insider’s rising stars of equity research.
- Lizzul says she’s much more bullish on beauty stocks than household goods makers today.
Anna Lizzul’s skill at analyzing businesses made an impression long before she started working on Wall Street, as a report she did on J. Crew’s business prospects earned her a phone call from then-CEO Mickey Drexler.
After stops at Wells Fargo and JPMorgan Chase, Lizzul currently leads coverage on beauty companies and some parts of the personal care and household products sector for Bank of America. Insider spoke to her in April for its rising stars of equity research series.
Lizzul explains that more traditional consumer product makers like Clorox or Kimberly-Clark face a challenging backdrop as a potential recession draws near. Clorox’s pandemic-era boom helped its stock price hit $237 in August 2020, as Americas snapped up bleach and wipes, but its brand appeal is now fading. The stock is trading 30% lower at around $163 late Tuesday morning.
“These are all fairly commoditized products that are not extremely outwardly branded to people who might not necessarily know what you use in your household,” she said. “Consumers are used to trading down,” or switching to lower-priced products, when times are tight.
But the beauty products sector is following a different pattern, making it a much more appealing area for investment, according to Lizzul.
“People tend to treat themselves for something small. If the consumer is in the market or is not able to buy a Gucci handbag, they might treat themselves to Gucci perfume,” she said. “We feel that the space has seen outperformance because of people treating themselves to affordable luxuries.”
That’s helped shares of beauty products maker Coty, up nearly 50% over the last six months. Lizzul says she felt the company had a lot of turnaround potential last year when most people on Wall Street had soured on it.
“I wasn’t held back by difficulties that the stock had had over the last several years,” she said, explaining that since she’d started covering Coty and its peers in September, she was able to evaluate the company with fresh eyes in a way that other analysts didn’t.
Overall, she says that customers treating themselves has contributed to a solid run for beauty stocks. But she’s most bullish on Elf Beauty even though it’s soared 300% over the last 12 months.
“We still feel there is still more room for growth, especially for Elf Beauty,” she said. “Retailers like Target and Walmart are increasing beauty and shelf space and seeing really good momentum.” The same goes for prestige retailers like Bloomingdale’s as they take space away from apparel and give it to specialized areas like fragrances, she added.
