Analyst Explains Why They Upgraded Their Rating on Ulta Salon (ULTA)

By Jason Carr

In a report released today, Rupesh Parikh from Oppenheimer upgraded Ulta Salon (NASDAQ: ULTA) to Buy, with a price target of $340. The company’s shares closed yesterday at $272.95.

Parikh observed:

“(11/8), we spent time reviewing recent beauty data points and assessing where management could guide FY19 (Jan. 2020) and FY20 (Jan. 2021). Based on our work, we expect a largely in-line Q3 delivery and see less upside similar to Q2. Skincare trends remain robust, while the makeup category data points appear a bit more mixed to us. Day front, we believe management could formally introduce guidance for mid-to-high teens EPS growth on average in FY19 and FY20. With a likely in-line longer-term guide and the potential for less Q3 upside, we now see limited gains into next week’s event. We remain upbeat on ULTA’s prospects this holiday season and beyond, and would take advantage of a likely volatile trade.”

According to TipRanks.com, Parikh is a 5-star analyst with an average return of 16.3% and a 64.1% success rate. Parikh covers the Services sector, focusing on stocks such as United Natural Foods, Wal-Mart Stores Inc, and Sprouts Farmers.

Currently, the analyst consensus on Ulta Salon is a Moderate Buy with an average price target of $294.60, representing a 7.9% upside. In a report issued on October 22, Piper Jaffray also maintained a Buy rating on the stock with a $286 price target.

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The company has a one-year high of $290.30 and a one-year low of $191.70. Currently, Ulta Salon has an average volume of 961.2K.

Based on the recent corporate insider activity of 49 insiders, corporate insider sentiment is negative on the stock. Most recently, in September 2018, Lorna Nagler, a Director at ULTA sold 2,000 shares for a total of $552,380.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

Ulta Beauty, Inc. is a beauty retailer of cosmetics, fragrance, skin care products, hair care products, and salon services. It provide unmatched product breadth, value and convenience in a distinctive specialty retail environment. The company was founded in January 9, 1990 and its headquartered in Bolingbrook, IL.