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Investing.com - UBS raised its price target on Ulta Beauty (NASDAQ:ULTA) to $680.00 from $640.00 on Friday, while maintaining a Buy rating on the stock following the company’s strong second-quarter performance. The beauty retailer, currently valued at $23.89 billion, is trading near its 52-week high of $538.59, according to InvestingPro data.
Ulta Beauty reported a 6.7% comparable sales increase in the second quarter, exceeding market expectations of approximately 5%, according to UBS. The growth consisted of a 3.7% increase in transactions and a 2.9% rise in average ticket size. The company maintains a healthy 42.82% gross profit margin and has achieved 2.94% revenue growth over the last twelve months.
UBS noted that while the overall beauty market improved from the first quarter to the second quarter, Ulta Beauty’s performance outpaced the broader sector. The firm attributed this outperformance to better execution, product newness, and other company initiatives. InvestingPro analysis reveals 11 analysts have revised their earnings expectations upward, with the company maintaining a GREAT overall financial health score.
The research firm observed improvements across all store cohorts, including locations that faced varying levels of competitive pressure - from stores with no significant competitor openings to those with multiple new competitors nearby.
UBS suggested that Ulta Beauty’s consistent strong performance and conservative approach to setting expectations could lead the market to reward the company with a premium multiple.
In other recent news, Ulta Beauty has garnered attention following its strong second-quarter performance, with several analyst firms raising their price targets for the company. DA Davidson increased its target to $625, citing Ulta’s recovery from previous sales weaknesses, while maintaining a Buy rating. TD Cowen raised its price target to $600, highlighting the company’s 6.7% comparable sales growth, which surpassed expectations. Similarly, Raymond James boosted its target to $605, noting the same 6.7% sales growth as the highest in eight quarters and maintaining an Outperform rating. Telsey Advisory Group raised its price target to $610, following Ulta’s earnings beat and revised full-year outlook, despite macroeconomic concerns. Goldman Sachs also increased its target to $584, reflecting Ulta’s better-than-expected quarterly results and updated fiscal guidance for 2025. These developments underscore a positive sentiment among analysts regarding Ulta Beauty’s recent financial performance.
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