ULTA Salon (ULTA): Good Quarter And Outlook, But The Valuation - Wells Fargo

Wells Fargo analyst, Ike Boruchow, noted that Ulta Salon (NASDAQ: ULTA) hurdled a high-bar with a meaningful top and bottom-line beat, while giving a better than expected outlook for 2016

The analyst believes that ULTA can continue to comp ~10% while taking margins higher over the next few years. Strong comps (+12.5% in Q4) continue to be driven by traffic (+8.6%) while GM also expanded +120bps (vs. guidance for flat) despite the choppy holiday sales environment.

The analyst raised FY16E EPS to $5.98, and the valuation range to $182 to $184 (previously $170 to $172). However, at ~30x P/E and 14x EV/EBITDA, valuation keeps him on the sidelines with a Market Perform rating.

For an analyst ratings summary and ratings history on ULTA Salon click here. For more ratings news on ULTA Salon click here.

Shares of ULTA Salon closed at $163.39 yesterday.

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