J.P. Morgan Increases Its Price Target on Ulta Salon, Cosmetics, & Fragrance to $40 (ULTA)

J.P. Morgan is out with its report today on Ulta Salon, Cosmetics, & Fragrance

, increasing its price target from $38 to $40. In a note to clients, J.P. Morgan writes, "The company had stated that its long-term target is to achieve low double-digit operating margin over the next 3-4 years (vs. 8.0% in 2010). While shares of ULTA carry a decent premium over the group (26x vs. 15x), we believe that with the potential for $3.00 to $3.50 in EPS power over the next 3-4 years (~30% CAGR), ULTA remains one of the most compelling growth stories in retail." J.P. Morgan maintains Overweight on ULTA. Shares of ULTA closed Friday at $36.73, down 0.89% from Thursday's close.