Trump signals tariff plans, Fed chair candidates, China deal progress
Investing.com - William Blair maintained its Market Perform rating on Ulta Beauty (NASDAQ:ULTA) stock on Wednesday, citing limited upside potential as shares approach the higher end of their three-year trading range. According to InvestingPro data, 14 analysts have recently revised their earnings estimates upward for the upcoming period, while the company maintains a "GREAT" financial health score.
The research firm noted that Ulta shares are currently valued at just below 18 times consensus 2026 EPS and 17 times their higher estimate, with projections of a 3% comparable sales growth and 12.3% operating margin showing recovery in what management has described as a transitional 2025. InvestingPro analysis indicates the stock is currently fairly valued, with a robust gross profit margin of 42.7% supporting its valuation metrics.
William Blair pointed out that with Wall Street estimates already at the high end of the company’s guidance range for the year, including higher earnings per share projections, there appears to be limited room for further upside in the stock price.
The firm views the current valuation in the high teens, compared to historical averages in the low 20s, as appropriately reflecting slower growth and potential margin challenges for the beauty retailer.
William Blair identified online share transfer in the beauty industry as a primary risk for Ulta shares, noting it could prove cannibalistic to retail operations and potentially cause broader operating margin pressure, with early signs of this risk appearing in recent quarters as comp growth has been almost entirely led by the online channel. Despite these challenges, InvestingPro data shows the company maintaining strong returns, with more detailed insights available in the comprehensive Pro Research Report covering 1,400+ top stocks.
In other recent news, Ulta Beauty has been the focus of several analyst updates and company announcements. The company’s fiscal 2025 guidance was reaffirmed, with 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 adjusted its price target for Ulta Beauty to $500, maintaining a Neutral rating, while Loop Capital increased its target to $510, continuing its Buy rating. TD Cowen also raised its price target to $465, keeping a Hold rating, highlighting potential upside if comparable sales improve.
In executive news, Ulta Beauty announced the departure of CFO Paula Oyibo, appointing Chris Lialios as the interim CFO. Evercore ISI maintained an Outperform rating with a $490 price target, viewing the search for a new CFO as a positive step. The company has initiated an external search for a permanent CFO. Additionally, Loop Capital noted that Ulta’s pricing has become more competitive, with prices now only 0.5% higher than competitors, down from an 11.6% premium. These developments reflect ongoing strategic adjustments and market positioning efforts by Ulta Beauty.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.