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Investing.com - DA Davidson has raised its price target on Ulta Beauty (NASDAQ:ULTA) to $550.00 from $485.00 while maintaining a Buy rating on the stock. The new target represents potential upside from the current trading price of $477.79, with the stock trading near its 52-week high of $491.98. According to InvestingPro data, 14 analysts have recently revised their earnings estimates upward for the upcoming period.
The firm based its decision on a refreshed beauty product overlap study that examined Ulta’s best sellers and compared their availability and pricing at competitors including Sephora, Amazon (NASDAQ:AMZN), Walmart (NYSE:WMT), and Target (NYSE:TGT).
DA Davidson’s analysis revealed that Ulta now demonstrates greater product differentiation compared to competitors than was observed in the previous study conducted in January.
The research firm highlighted this finding as consistent with its investment thesis that competitive pressures facing Ulta Beauty are subsiding.
While DA Davidson acknowledged that the beauty retail space remains competitive in terms of both product availability and pricing, it concluded that "the worst does appear to be behind us" for Ulta Beauty.
In other recent news, Ulta Beauty announced the immediate departure of CFO Paula Oyibo, with Chris Lialios stepping in as interim CFO. The company is conducting an external search for a permanent replacement, aiming for someone with international market experience to support its expansion plans into Mexico and the Middle East. Despite the management change, Ulta Beauty reaffirmed its fiscal 2025 guidance, maintaining expectations for comparable store sales growth between 0% and 1.5%, an operating margin between 11.7% and 11.8%, and diluted earnings per share between $22.65 and $23.20. BofA Securities raised its price target for Ulta Beauty to $500, citing potential margin pressures due to increased investments in advertising and store labor but suggesting room for outperformance. Evercore ISI maintained its Outperform rating with a $490 price target, viewing the CFO search as a positive sign. William Blair reiterated a Market Perform rating, noting limited upside potential as Ulta shares approach the higher end of their trading range. Meanwhile, Citi maintained its neutral rating and $450 price target, emphasizing the company’s conservative fiscal outlook amid macroeconomic uncertainties. These developments highlight a period of strategic transition for Ulta Beauty as it navigates market challenges and leadership changes.
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