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On Friday, JPMorgan analyst Christopher Horvers increased the price target for ULTA Beauty (NASDAQ: ULTA) to $525 from the previous $477, while maintaining an Overweight rating on the stock. Horvers highlighted ULTA’s performance, which surpassed expectations with a comparable store sales (comp) increase of 2.9% against the estimated 0.7%. He also noted the company’s operating margin reached 14.1% compared to the expected 12.4%, which contributed to a 15% earnings per share (EPS) upside. According to InvestingPro data, eight analysts have recently revised their earnings estimates upward, while the company maintains a strong gross profit margin of 42.78%.
The analyst pointed out that ULTA’s first-quarter results exceeded forecasts, which were already raised ahead of the report, and that the company’s slight increase to its annual forecast was particularly noteworthy in the current retail environment. Horvers took this as a positive signal, especially given that ULTA provided guidance before Liberation Day, a rare move for retailers in the first quarter. InvestingPro analysis reveals the company’s impressive financial health score of "GREAT," supported by strong profitability metrics and management’s aggressive share buyback program.
ULTA’s market share gains in both mass and prestige segments were also emphasized, despite increased competition and access from Amazon (NASDAQ:AMZN) and the expansion of retail doors over the past four years. Horvers mentioned ULTA’s competitive performance in relation to Sephora at Kohl’s (NYSE:KSS), which only saw a 1% comp increase in the first quarter.
The analyst commended ULTA’s profitability and execution under the leadership of new CEO Kecia Steelman, who was promoted from COO in January. He believes these factors justify an expansion in the company’s valuation multiples. Additionally, Horvers expects upward revisions in profitability projections, with the market potentially anticipating EPS of $25-26.
Horvers concluded by stating that given ULTA’s long-term EPS algorithm and the quality of the industry, the company deserves to trade at a premium to the normalized market multiple of 18 times earnings. As a result, the updated December 2025 price target of $525 is set at 19 times his estimates for 2026, which are above consensus, and equivalent to 12 times enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA). He reiterated the Overweight rating and confirmed that ULTA remains on the US Equity Analyst Focus List.
In other recent news, ULTA Beauty announced impressive first-quarter results for fiscal 2025, with earnings per share (EPS) of $6.70, surpassing market expectations of $5.75. The company also reported revenue of $2.85 billion, exceeding the anticipated $2.79 billion. Following these strong results, several analyst firms adjusted their price targets for ULTA. Citi raised its target to $450 while maintaining a Neutral rating, citing ULTA’s robust comparable store sales and lower expenses. Raymond (NSE:RYMD) James increased its target to $500, maintaining an Outperform rating, and highlighted ULTA’s growth in both mass and prestige categories. Morgan Stanley (NYSE:MS) set a new price target of $550, maintaining an Overweight rating, noting the positive risk/reward scenario for the retailer. BofA Securities also raised its target to $455, keeping a Neutral rating, and acknowledged the company’s strong sales and gross margin performance. Analysts have noted ULTA’s strategic initiatives and execution as key factors in its recent success, with some expressing optimism about the company’s future growth potential amidst a dynamic economic environment.
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