Market Overview

4 Reasons To Like Ulta Beauty, According To Oppenheimer

4 Reasons To Like Ulta Beauty, According To Oppenheimer
Related ULTA
10 Biggest Price Target Changes For Wednesday
8 Biggest Price Target Changes For Tuesday

Oppenheimer's prior case against being aggressive on Ulta Beauty Inc (NASDAQ: ULTA) stock was based on concerns of a slowdown in the beauty segment -- an assumption that no longer holds true.

The Analyst

Oppenheimer's Rupesh Parikh upgraded Ulta Beauty from Perform to Outperform with a price target lifted from $220 to $280.

The Thesis

The case for being aggressive on Ulta Beauty's stock can now be made for four reasons, which Parikh said should yield comps and underlying EPS growth over the years ahead.

  • The company's management team deserves credit for implementing new initiatives on the merchandising front to stabilize comp trends and introduce a "meaningful amount" of innovation at stores.
  • The U.S. beauty space is characterized as being on "more stable footing" with strength seen in the prestige segment.
  • Ulta's stock is trading around 21.8x next 12 months P/E multiple, which is attractive given the analyst's model of a more than 20 percent EPS growth ahead.
  • Parikh's first-hand checks and store visits on a nearly weekly basis consistently shows "high levels of newness" in both the prestige and mass beauty segments.

Price Action

Shares of Ulta Beauty were trading higher by 1 percent Tuesday at $249.63.

Related Links:

Ulta's Valuation Pushes This Bull To The Sidelines

Guggenheim Survey Of Ulta Consumers Paints Bullish Picture

Latest Ratings for ULTA

Jan 2019Wells FargoMaintainsOutperformOutperform
Dec 2018CitigroupInitiates Coverage OnBuy
Dec 2018OppenheimerMaintainsOutperformOutperform

View More Analyst Ratings for ULTA
View the Latest Analyst Ratings

Posted-In: Beauty Beauty Products Oppenheimer retailersAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga


Related Articles (ULTA)

View Comments and Join the Discussion!

Latest Ratings

CNPRBC CapitalUpgrades34.0
View the Latest Analytics Ratings
Don't Miss Out!
Join Our Newsletter
Subscribe to:
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
Your weekly roundup of hot topics in the exciting world of fintech.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

Mid-Afternoon Market Update: Netshoes Drops Following Q1 Results; Red Violet Shares Surge

A Fast Start For This Electric Vehicle ETF