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Investing.com - Telsey Advisory Group raised its price target on Ulta Beauty (NASDAQ:ULTA) to $610.00 from $590.00 on Friday, while maintaining an Outperform rating on the stock. The beauty retailer, currently valued at $23.9 billion, has seen its stock trade near its 52-week high of $538.59, reflecting strong market confidence.
The price target increase follows Ulta’s quarterly earnings beat and raised full-year outlook, which Telsey attributed to strong first-half performance despite the company taking a cautious approach to the second half amid macroeconomic uncertainties.
Telsey noted that Ulta’s revenue, margins, and earnings per share all exceeded expectations in the quarter, benefiting from solid year-over-year category improvements and more effective promotional strategies, despite some fixed cost deleverage and higher costs.
The firm expressed confidence in CEO Kecia Steelman’s management of the business as Ulta makes progress on its "Ulta Beauty Unleashed" strategic plan, highlighting the company’s store portfolio, infrastructure, omni-channel capabilities, loyalty program, brand partnerships, and growing international business as competitive advantages.
Telsey’s new $610 price target assumes a 21.7x multiple on its two-year forward EPS estimate of $28.17, compared to the 10-year next-twelve-months median of 22.1x and the recent multiple of 21.2x.
In other recent news, Ulta Beauty reported impressive second-quarter results for fiscal year 2026, surpassing both earnings and revenue expectations. The company achieved an earnings per share of $5.78, significantly higher than the forecasted $4.99, and revenue reached $2.79 billion, exceeding predictions by 4.89%. These strong results have led to increased confidence among investors. Following the earnings report, Goldman Sachs raised its price target for Ulta Beauty to $584 from $530, maintaining a Buy rating. Similarly, Canaccord Genuity increased its price target to $650 from $630, also maintaining a Buy rating. The company’s second-quarter performance was bolstered by a 6.7% year-over-year growth in comparable sales, well above the anticipated 2.9%. Overall sales increased by 9.3% compared to the previous year, supported by contributions from the Space NK acquisition and new store openings. Ulta Beauty also updated its fiscal year 2025 guidance, projecting higher revenue, operating margin, and earnings per share.
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