UPDATE: Credit Suisse Upgrades Ulta Salon to Outperform on Pullback

Credit Suisse upgraded Ulta Salon, Cosmetics & Fragrance

from Neutral to Outperform with a $110 price target. Credit Suisse analyst Gary Balter wrote, "Based on where the stock was trading last night in the aftermarket, it is down more than 25% from its recent high. While not having a permanent CEO and weaker gross margins in Q1 raise concerns, the question we asked is do we believe in the growth potential of the concept. … Given that our answer is yes, and given that yes implies a growth rate of 25% to 30% at a low 20's multiple, we now like that risk reward. Yes, there are issues raised primarily from the Q1 guidance on gross margin and Q4 inventory levels, but we believe these are temporary issues and that the underlying story is intact." Ulta Salon, Cosmetics & Fragrance closed at $88.25 on Thursday.