Ulta Beauty Poised for Growth: Buy Rating Affirmed Amid Positive Industry Trends

J.P. Morgan analyst Christopher Horvers has maintained their bullish stance on ULTA stock, giving a Buy rating on March 28.

Christopher Horvers has given his Buy rating due to a combination of factors that indicate a positive outlook for Ulta Beauty’s stock. His analysis reveals a correlation between Ulta’s same-store sales performance and broader beauty product sales trends in the food, drug, and mass channels, as tracked by NielsenIQ. Despite a modest increase of 0.7% in total beauty product sales in these channels for the four weeks ending March 23rd, Ulta’s correlation with these trends suggests a potential for steady performance. Moreover, specific beauty categories such as cosmetics, fragrances, and hair care are showing improved sales growth, which could signal a robust operating environment for Ulta.

Horvers’s optimism is further bolstered by the acceleration in key product segments, with fragrances and hair care displaying especially strong growth. Additionally, management’s guidance for the fiscal year indicates a conservative but positive same-store sales trajectory, with expectations for improvement as the year progresses. Taking into account Ulta’s historical sales data and the current industry trends, Horvers believes that while first-quarter comps may fall below J.P. Morgan’s forecasts, the overall prospects for Ulta remain favorable, warranting a Buy rating for the stock.

In another report released on March 28, Oppenheimer also assigned a Buy rating to the stock with a $600.00 price target.

Based on the recent corporate insider activity of 36 insiders, corporate insider sentiment is neutral on the stock.

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Ulta Beauty (ULTA) Company Description:

Ulta Beauty, Inc. is a beauty retailer of cosmetics, fragrance, skin care products, hair care products, and salon services. It provides unmatched product breadth, value and convenience in a distinctive specialty retail environment. The company was founded in January 9, 1990 and is headquartered in Bolingbrook, IL.