Ulta Gets A Touch-Up: JPMorgan Lifts Price Target Ahead Of Q1 Earnings

JPMorgan analyst Christopher Horvers reiterated the Overweight rating on Ulta Beauty, Inc. ULTA, raising the price forecast from $475 to $477.

Ulta will report first-quarter earnings on reports Thursday, May 29, after the market close.

Horvers notes that during Ulta’s fourth-quarter earnings update, the company mentioned comparable sales trends were nearly flat. They’re starting to improve thanks to the momentum of its semi-annual event and a more stable consumer and beauty market.

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Broadly, the analyst sees beauty category growth normalizing to its historical 3%-4% range, positioning Ulta to gain share thanks to its unique mix of mass and prestige offerings and strong industry position. This, Horvers writes, should lead to better margin conversion, earnings growth, and potential multiple expansion.

The analyst also points out that, during the firm’s April 3 RRU conference, Ulta Beauty CEO Kecia Steelman maintained a positive outlook. She highlighted consistent consumer behavior since the Q4 report and strong performance during promotional periods, even as overall engagement remained soft in quieter times.

Horvers observes that since Ulta's last report, quarter-to-date trends have shown modest improvement—about 50 basis points—according to Nielsen and Circana data, with momentum building sequentially from January through March.

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Additional insights from Coty Inc. COTY and Estee Lauder Companies EL suggest that April performed better than March. Based on this, the analyst has raised its forecast to 0.7%.

Although Ulta did not offer formal second-quarter guidance, Horvers notes that management expects comparable sales to remain roughly in line, with the second and third quarters benefiting from easier year-over-year comparisons.

While consumer behavior appears stable or slightly better than a year ago, fading market share pressures and stronger execution should support improvement.

Price Action: Ulta Beauty shares are trading lower by 1.38% to $405.04 at last check Friday.

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