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Loop Capital raised its price target on Ulta Beauty (NASDAQ:ULTA) to $510.00 from $480.00 on Monday, while maintaining a Buy rating on the beauty retailer’s stock. The new target falls within the broader analyst range of $350-$550, with 14 analysts recently revising their earnings estimates upward according to InvestingPro data.
The price target increase follows Loop Capital’s updated prestige beauty products pricing study, which found Ulta Beauty’s prices are now just 0.5% more expensive than competitors on average, a significant improvement from the 11.6% premium observed in December.
The December pricing gap was attributed to beauty department-wide promotions at Macy’s (NYSE:M) and Nordstrom (NYSE:JWN) during that period, according to Loop Capital’s analysis.
Loop Capital also cited improving consumer sentiment as a positive factor for Ulta, noting the University of Michigan’s preliminary index of consumer sentiment increased in June for the first time in six months.
The research firm expressed its belief that beauty products are less discretionary than many investors realize, particularly for Ulta Beauty’s core "beauty enthusiast" customers, supporting its continued Buy rating on the stock.
In other recent news, ULTA Beauty has reported notable first-quarter financial results, with sales reaching approximately $2.848 billion, surpassing analyst expectations of $2.794 billion. This represents a 4.5% year-over-year increase, alongside a 2.9% rise in comparable store sales. Analysts have responded positively, with UBS raising its price target to $525 and maintaining a Buy rating, while Telsey Advisory Group increased its target to $520 and kept an Outperform rating. BMO Capital Markets adjusted its price target to $454, citing the strong first-quarter performance and maintaining a Market Perform rating. Piper Sandler also raised its price target to $437, though it retains a Neutral stance due to macroeconomic uncertainties. TD Cowen set a new price target of $465, noting potential upside if store sales continue to improve. ULTA’s updated guidance reflects cautious optimism, with increased projections for the full year despite potential challenges in the latter half. The company’s strategic initiatives, including growth in e-commerce and brand engagement, have been highlighted as contributing factors to its strong market presence.
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