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On Tuesday, JPMorgan maintained a positive outlook on ULTA Beauty (NASDAQ:ULTA) shares, reiterating an Overweight rating with a price target of $477.00. The company, currently trading at $407.04, has demonstrated solid financial performance with revenue of $11.3 billion and an impressive gross profit margin of 42.78% over the last twelve months. According to InvestingPro data, seven analysts have recently revised their earnings estimates upward for the upcoming period. The firm noted that although total Beauty Product sales in the Food, Drug, and Mass channels saw a slight decline of 1.5% for the four weeks ending May 17, 2025, there has been an improvement compared to the first quarter. ULTA’s same-store sales reportedly have a significant correlation with NielsenIQ cosmetics trends, which suggests a connection between the two data sets. InvestingPro analysis reveals the company maintains a strong financial health score of "GREAT," with liquid assets exceeding short-term obligations and a healthy current ratio of 1.7.
ULTA Beauty’s performance has been relatively stable, with the company approaching its annual same-store sales growth target, which ranges from flat to 1%. This assessment comes after ULTA’s participation in prominent sales events such as the 21 Days of Beauty. Management’s commentary during the RRU conference on April 3, 2025, reflected confidence in the consumer’s response to these events, despite periods of lower engagement.
The data indicates a modest uptick in the second quarter to date (2QTD) trends, showing a sequential improvement compared to the first quarter. JPMorgan analysts anticipate a 2% comparable store sales (comp) growth for ULTA in the second quarter, citing easier comparisons with the previous year due to less effective promotions and other disruptions.
JPMorgan’s analysis also includes a look back at ULTA’s performance, with an acknowledgment of the company’s semi-annual event, 21 Days of Beauty, which occurred from March 7 to February 28, 2025, and other sales initiatives such as the Spring Haul from March 28 to April 5, 2025. These events, along with a recovering consumer and beauty backdrop, have contributed to the company’s recent strength.
Overall, JPMorgan’s assessment aligns with the consensus estimates and their own raised expectations for ULTA’s first-quarter same-store sales growth. The firm’s forecast is supported by improved quarter-to-date trends and management’s projections for consistent comparable sales throughout the year. Based on InvestingPro’s Fair Value analysis, ULTA appears slightly undervalued at current levels, trading at a P/E ratio of 15.98. Discover more valuable insights about ULTA and 1,400+ other stocks through InvestingPro’s comprehensive research reports, designed to help investors make smarter decisions.
In other recent news, ULTA Beauty’s financial outlook has garnered attention from several major analysts. JPMorgan has raised its price target for ULTA Beauty to $477, maintaining an Overweight rating due to expectations of a slight increase in first-quarter comparable sales and a strong earnings per share (EPS) forecast. The firm anticipates a 0.7% rise in comp sales, slightly above the general market expectation. Citi analyst Susan Anderson also increased the price target to $425, projecting ULTA will surpass first-quarter EPS expectations with an estimate of $5.99, attributing this to better-than-expected comparable store sales and improved gross margins.
Meanwhile, DA Davidson reiterated a Buy rating with a $415 price target, despite acknowledging a dip in consumer confidence affecting ULTA’s short-term performance. UBS analysts maintained their Buy rating and a $490 price target, citing stabilization in market share and the manageable impact of tariffs. They noted that ULTA’s stock is trading at a valuation slightly above 15 times the next twelve months’ consensus earnings estimates.
These developments come as ULTA Beauty navigates a competitive landscape, with the Sephora rollout in Kohl’s (NYSE:KSS) stores potentially having reached its peak impact. Analysts are keeping a close watch on ULTA’s ability to adapt to economic challenges and competitive pressures, with some firms expressing confidence in the retailer’s long-term prospects. Investors will be particularly attentive to ULTA’s upcoming earnings report and any indications of sustained growth in the beauty retail sector.
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