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Nomura Initiates Coverage Ulta Salon And Sally Beauty

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Normura initiated coverage with Neutral ratings on Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ: ULTA) with a $126 price target and Sally Beauty Holdings, Inc. (NYSE: SBH) with a $32 price target on Friday.

Analyst Simeon A. Siegel expected “Ulta to post LDD to mid-teens sales growth amid a challenged retail environment, given growing brand awareness, analytically charted store expansion, a multiyear comp waterfall, increased loyalty growth, and increasing omni-channel capabilities.”

Siegel awaited a better entry point on the stock. The price target of $126 was based 25x the firm’s FY16 EPS estimate of $5.36 discounted back one year.

Siegel expected ongoing comp and EPS consistency in Sally Beauty, however, “with the shares up 20 percent in the last six months (vs S&P 500 up 4.3 percent), SBH has been on an impressive run, with expectations baking in (as-yet-to-occur) reacceleration in top- and bottom-line trends.”

“Although we believe SBH is a compelling long-term value, we believe the shares may take a pause in the near term, and we await a better entry point,” according to the analyst note.

The $32 price target on SBH was based on 17x the firm’s FY15E EPS of $1.71.

Sally Beauty recently traded at $30.05, down 1.89 percent.

Ulta Salon, Cosmetics & Fragrance recently traded at $131.93, down 0.23 percent.

Latest Ratings for ULTA

DateFirmActionFromTo
Jun 2018Atlantic EquitiesInitiates Coverage OnOverweight
Jun 2018Goldman SachsDowngradesBuyNeutral
Jun 2018Credit SuisseMaintainsOutperformOutperform

View More Analyst Ratings for ULTA
View the Latest Analyst Ratings

Posted-In: Nomura Simeon A. SiegelAnalyst Color Price Target Initiation Analyst Ratings

 

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