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How Analysts View Ulta Beauty Stock

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Analysts’ recommendations

Most of the analysts covering Ulta Beauty (ULTA) stock recommend “buy.” Of the 25 analysts tracking the stock, 19 (76%) recommend “buy,” six recommend “hold,” and none recommend “sell.”

Several analysts have raised their 12-month price target for Ulta stock in the last two months. On April 15, JPMorgan Chase increased its price target for Ulta Beauty stock to $390 from $345, and Morgan Stanley raised it to $375 from $355. On April 26, Oppenheimer raised its price target to $400 from $360, and on May 14, Guggenheim increased its price target to $375 from $350.

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Strategic initiatives

Ulta Beauty’s strategic initiatives, including its continued enhancement of its merchandise assortment, attractive loyalty program, and strong e-commerce channel, have been growing the company’s sales. As of the end of fiscal 2018, Ulta Beauty’s loyalty program had over 31.8 million active members. According to the company, its loyalty member transactions accounted for over 95% of its annual sales.

To enhance its product offerings and attract more customers, Ulta Beauty has been entering into key partnerships with digitally native brands such as Kylie Cosmetics and Morphe.

Ulta Beauty stock had risen 36.8% this year as of May 28, outperforming the S&P 500, which had risen 11.8%. The stock has risen 7.1% since the company announced positive results for the fourth quarter of fiscal 2018 in March. Ulta Beauty’s sales grew by an impressive 14.1% in fiscal 2018 while several retailers struggled amid market competition and uncertain conditions.

Ulta Beauty is scheduled to announce its results for fiscal 2019’s first quarter after the market closes on May 30. As of May 28, analysts’ average 12-month target of $362 for Ulta stock indicated an ~8.0% upside. That target will likely be revised based on the company’s first-quarter performance and outlook.

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