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On Friday, BofA Securities analyst Lorraine Hutchinson updated her outlook on ULTA Beauty (NASDAQ: ULTA), increasing the price target from $380.00 to $455.00 while maintaining a Neutral rating on the stock. Hutchinson’s revision follows ULTA’s reported first-quarter earnings per share (EPS) of $6.70, which exceeded both the analyst’s and Visible Alpha consensus (VA cons) estimates of $5.48 and $5.85, respectively. The beat was attributed to stronger sales and gross margin performance, with InvestingPro data showing an impressive gross margin of 42.78% and eight analysts recently revising their earnings estimates upward.
ULTA’s management has adjusted its fiscal year 2025 (F25) EPS guidance upwards to a range of $22.65 to $23.20, alongside a revised comparable store sales (comp) guidance of 0-1.5%. This change is driven by the company’s robust performance in the quarter, although there is an expectation of sales deceleration in the second half of the year due to macroeconomic uncertainties. According to InvestingPro analysis, ULTA maintains strong financial health with a current ratio of 1.7 and operates with moderate debt levels, suggesting resilience against potential headwinds.
The analyst at BofA Securities noted that while there are sales opportunities for ULTA, there is also potential near-term margin pressure as the company reinvests in its business. The new price objective of $455 is now based on an 18 times multiple of the forecasted 2026 earnings per share (F26E EPS), an increase from the previous 15 times multiple. This adjustment reflects early progress on ULTA’s turnaround efforts.
Hutchinson has also raised her own F25E EPS forecast by 2% in response to ULTA’s first-quarter earnings outperformance. The updated valuation reflects a more optimistic view of the company’s earnings potential moving forward, despite the ongoing investments and potential challenges ahead.
In other recent news, Ulta Beauty (NASDAQ:ULTA) reported impressive financial results for the first quarter of 2025, surpassing market expectations. The company achieved an earnings per share of $6.70, significantly above the projected $5.75, and generated revenue of $2.85 billion, exceeding forecasts of $2.79 billion. This strong performance reflects a 4.5% year-over-year revenue growth, driven by new brand launches and product innovations. Ulta Beauty has also provided an optimistic full-year guidance, anticipating net sales between $11.5 billion and $11.7 billion. The company expects comparable sales growth to range from flat to 1.5%, with potential declines in the second half of the year. Analysts have noted Ulta’s strategic focus on product innovation and omnichannel expansion as key drivers of its success. The company’s leadership emphasized its commitment to maintaining a strong operating margin and adapting to a dynamic operating environment. These developments highlight Ulta Beauty’s resilience and ability to capitalize on evolving consumer trends.
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