What 3 Ulta Beauty Analysts Are Saying About Cosmetics Retailer's Q2

Ulta Beauty Inc ULTA shares are rallying after the cosmetics retailer reported second-quarter earnings Thursday.

Here's how three Wall Street analysts reacted to the print. 

The Ulta Beauty Analysts: Raymond James analyst Joseph Altobello maintained a market perform rating on Ulta. 

Credit Suisse analyst Michael Binetti maintained an Outperform rating and hiked the price target from $265 to $275.

BofA Securities analyst Lorraine Hutchinson maintained a Neutral rating with a $230 price target. 

Ulta's Q2: Ulta reported second-quarter earnings per share of 73 cents, well shy of last year's $2.76 and shy of the analysts' estimates.

RayJay was expecting earnings of $1.05 per share, while Credit Suisse was expecting 92 cents. 

E-commerce sales were up 200% in the second quarter.

“We’re encouraged at Ulta’s ability to adapt to a much larger digital mix of business,” said Credit Suisse's Binetti.

E-commerce represented 43% of the company’s second-quarter sales, up from 10% one year ago

Second Half 2020 Uncertainties: RayJay's neutral stance is driven by "a distinct lack of visibility into the return of consumers to pre-pandemic shopping habits, as well as continued sluggish trends in the U.S. makeup category,” Altobello said in a note.

BofA's Hutchinson said Ulta is cautious on the fourth quarter due to a "significant" channel shift toward e-commerce and the likelihood of continued weakness in store traffic over the holidays. 

Ulta is also cautious on store openings, the analyst said. 

Ulta, which has 1,264 stores open now, has a goal for 1,500 to 1,700 stores.

The company committed to opening 30 stores next year, lower than Hutchinson’s estimate of 70.

Fiscal 2020 Targets: RayJay lowered its EPS estimate for the full fiscal year from $6 to $4. Credit Suisse lowered its estimate from $4.65 to $3.  

ULTA Price Action: Ulta shares were trading 5.97% higher at $237.31 at last check Friday. The stock is down 11.5% in 2020 and down over 30% in the last 52 weeks.

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