Susan Anderson, managing director at Canaccord Genuity, joins BNN Bloomberg to share her Hot Picks in healthcare and beauty.

Healthcare and beauty stocks are attracting investor interest as consumers continue to spend selectively amid economic uncertainty, inventory adjustments and uneven market sentiment. Everyday and self-care categories have shown resilience, even as broader consumer stocks lag the market.

BNN Bloomberg spoke with Susan Anderson, managing director at Canaccord Genuity, about consumer spending trends and why select healthcare and beauty stocks could be positioned for upside in 2026.

Key TakeawaysConsumer spending has remained resilient despite affordability pressures, inventory adjustments and uneven confidence across income groups.Investor sentiment toward consumer stocks remains cautious, creating potential value opportunities outside market-leading themes.Niche and staples-like healthcare products benefit from limited competition and steady demand across economic cycles.Fragrance demand continues to grow, supported by younger consumers and more affordable entry-level products.Operational improvements and normalization of supply and inventory trends could support earnings recovery into 2026.Susan Anderson, managing director at Canaccord Genuity Susan Anderson, managing director at Canaccord Genuity

Read the full transcript below:

ANDREW: Time for Hot Picks in beauty and health care. Our guest has Sally Beauty Holdings as her top pick. We’re joined now by Susan Anderson, managing director at Canaccord Genuity. Susan, thank you very much for coming on the show. Let’s start with Sally. What do they do, and why do you think the stock offers promise?

SUSAN: Sally Beauty is a relatively quiet stock that not a lot of people are aware of. It’s a beauty retailer and wholesaler, catering to both retail consumers and professional salon customers. About 40 per cent of the business comes from hair colouring, and roughly 80 per cent comes from hair colouring and hair maintenance combined.

Both channels are really focused on hair, and we view the company as having something close to a monopoly in the hair-colouring space. It’s one of the few companies that offers such a large selection of professional hair colouring for both salons and do-it-yourself consumers at home.

They’ve been reinvigorating the business through new growth opportunities, cost-efficiency programs and store remodels. They’re finding new ways to grow through innovative products, store refreshes, digital tools and acquisitions in professional distribution, while also expanding into new categories such as skin care.

They’re also opening new formats, including Happy Beauty, a value-oriented consumer concept that sells products such as K-beauty. Through their Fuel for Growth initiative, they’re targeting about $120 million in savings through fiscal 2026, which should help margins return to double digits. Margins are around 8.5 per cent today.

Sally trades at about 17 times next year’s earnings estimates, and we see an opportunity for multiple expansion. Most specialty retailers trade at high single-digit to low-teen multiples. The company is also looking to return to high single-digit to double-digit earnings growth. We see this as a good value play, with a $19 price target based on nine times next year’s earnings.

ANDREW: Your next idea is Interparfums. I hope I have the pronunciation right. What do they do, and why are you attracted to the stock?

SUSAN: That’s correct. Interparfums is a fragrance licenser. The company primarily sells fragrances under licenses from luxury brands such as Coach, as well as lifestyle brands.

Fragrance sales have been growing at a double-digit pace recently. Over the last three months, Circana data in the U.S. shows double-digit growth. We think Interparfums is well positioned to benefit from that strength.

We’re seeing more consumers enter the fragrance category and use it as part of their daily routines, particularly younger consumers. Fragrance mists, which are more affordable, are gaining traction with that demographic.

The stock has moved up recently, but it still trades at just over 18 times next year’s earnings, compared with a mid-20s multiple over the past five years. That’s the lowest valuation we’ve seen since the Great Recession, largely due to a mismatch between sell-in and sell-out.

Retailers globally have been aggressively reducing inventory levels, even though fragrance sales to consumers remain strong. Advances in AI have allowed retailers to manage inventories much more tightly. That dynamic has pressured sales to retailers, but we believe we’re nearing the end of that imbalance.

The company guided conservatively for fiscal 2026, expecting sales growth of just one per cent, despite the broader fragrance category growing at high single-digit to double-digit rates. We see upside to estimates and view this as a buying opportunity at current valuations.

ANDREW: We’re tight for time. Tell us about Prestige Consumer Healthcare.

SUSAN: Prestige Consumer Healthcare is a staples-like play in the over-the-counter space. It owns a portfolio of niche brands such as Dramamine and Compound W. These brands have limited competition and little private-label exposure because they operate in very specific categories.

Large consumer packaged goods companies typically focus on much bigger categories, such as cough and cold, so these niche areas don’t really move the needle for them. Prestige also has best-in-class EBIT margins in the low-30 per cent range and generates strong free cash flow, which it has been using for share buybacks.

The company generates about $250 million in free cash flow annually. Every $80 million in share repurchases adds roughly 10 cents to earnings. It may also pursue acquisitions to accelerate growth, but if it doesn’t, it can continue returning capital to shareholders.

The stock pulled back last year due to supply-chain issues and retailer destocking, similar to what we’ve seen elsewhere. The company also faced challenges in its eye-care business, which should be resolved by the back half of fiscal 2026. Prestige recently acquired an eye-care manufacturer in Canada, allowing it to bring more production in-house and reduce future risk.

This is a high-quality, high-margin, staples-like business with a free cash flow yield of about eight per cent. The stock trades at roughly 13 times next year’s earnings, compared with about 15 times historically and closer to 20 times for large-cap personal care peers. We think this is an attractive entry point.

ANDREW: Susan, thank you very much. We appreciate it.

SUSAN: Thanks for having me.

ANDREW: Susan Anderson is managing director at Canaccord Genuity.

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This BNN Bloomberg summary and transcript of the Jan. 21, 2026 interview with Susan Anderson are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.