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Investing.com - Raymond James raised its price target on Ulta Beauty (NASDAQ:ULTA) to $605.00 from $580.00 on Friday, maintaining an Outperform rating following the company’s strong second-quarter results. The beauty retailer, currently valued at $23.89 billion, is trading near its 52-week high of $538.59, though InvestingPro analysis suggests the stock is slightly overvalued at current levels.
The beauty retailer reported comparable sales growth of 6.7% year-over-year in the second quarter, its highest in eight quarters, significantly outpacing analyst expectations of approximately 3%. The growth was driven by a 3.7% increase in transactions and a 2.9% rise in average ticket size. This momentum has contributed to an impressive 44.84% price return over the past six months. InvestingPro subscribers can access 10+ additional exclusive insights about Ulta’s performance metrics and growth trajectory.
Ulta Beauty posted earnings per share of $5.78, exceeding Raymond James’ estimate of $5.04 and the consensus forecast of $5.10. Gross margin expanded 80 basis points year-over-year to 39.2%, while operating margin declined just 50 basis points to 12.4%, still ahead of analyst projections. The company maintains a strong financial health score of "GREAT" according to InvestingPro metrics, with a robust gross profit margin of 42.82% over the last twelve months.
The company raised its full-year outlook across all metrics, with operating margin expected to reach its long-term target this year. Raymond James noted that all product categories showed growth during the quarter, with both prestige and mass segments performing well.
Raymond James justified its higher price target based on 15x EV/EBITDA and 22x P/E on fiscal year 2026 estimates, representing a one-turn increase from its previous valuation, citing improvements in comparable sales and margins as key factors.
In other recent news, Ulta Beauty has reported a strong second quarter for fiscal year 2026, surpassing both earnings and revenue expectations. The company achieved an earnings per share of $5.78, significantly exceeding the forecast of $4.99, and reported revenue of $2.79 billion, which was 4.89% above predictions. Following these impressive results, several firms have adjusted their outlook on Ulta Beauty. Telsey Advisory Group raised its price target to $610, citing the company’s strong first-half performance and increased full-year outlook. Goldman Sachs also increased its price target to $584, maintaining a Buy rating after the company’s earnings beat. Canaccord Genuity raised its price target to $650, highlighting Ulta’s 6.7% year-over-year comparable sales growth and overall sales increase of 9.3%. These developments reflect a positive sentiment among analysts regarding Ulta Beauty’s financial performance and future prospects.
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