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Analysts Revise Ulta Beauty’s Price Target after Fiscal 4Q17 Results

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Current ratings

On March 16, 2018, Ulta Beauty (ULTA) stock was rated a “buy” by 17 of 27 analysts (or 63%) covering the beauty retailer. The stock was rated a “hold” by ten analysts. None of the analysts currently gave a “sell” recommendation for Ulta Beauty stock. 

Several analysts lowered their price targets for Ulta Beauty stock following the company’s fiscal 4Q17 results, which were announced on March 15. As we discussed previously in this series, Ulta Beauty was almost in line with analysts’ sales estimates but lagged the consensus earnings estimate.

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Revision to price targets

On March 16, 2018, Morgan Stanley (MS) lowered its price target for Ulta Beauty stock to $260.00 from $285.00. Credit Suisse (CS) revised its price target to $235.00 from $245.00. RBC Capital has a price target of $205.00 compared to its previous estimate of $225.00. 

Jefferies cut its price target to $260.00 from $300.00. Deutsche Bank lowered its price target to $215.00 from $244.00. Telsey Advisory Group lowered its price target to $260.00 from $300.00. 

BMO Capital has cut its price target to $220.00 from $225.00. Stifel lowered its price target to $225.00 from $230.00.

On March 16, the average 12-month price target for Ulta Beauty stock was $249.09. This price estimate reflects an upside potential of 12.3% compared to the closing stock price of $221.88 on March 16. On a YTD (year-to-date) basis, Ulta Beauty stock was down 0.8% on March 16.

Growth strategy

With prestige boutiques driving strong sales, Ulta Beauty (ULTA) plans to add 675 boutiques in fiscal 2018, compared to 700 in fiscal 2017. This expansion plan includes the rollout of more than 200 new MAC boutiques.

The company is also improving its skin care offerings through brands like Crepe Erase, Mamonde, and House 99 by David Beckham. Ulta Beauty has also been making significant enhancements to its mass cosmetics offerings. The company has expanded brands like Morphe, E.L.F, and Makeup Revolution. It has also introduced new brands such as Milani, Flower, and Wet n Wild.

The company is trying to improve the performance of prestige cosmetics by bringing in new products like Beauty by POPSUGAR. The company is also expanding the presence of high-growth brands like Estée Lauder, NARS, and COVER FX.

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