Jefferies Raises Price Target on ULTA Salon (ULTA), Strong Results Followed Buy Solid Outlook
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Price: $515.14 -2.41%
Rating Summary:
21 Buy, 13 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
21 Buy, 13 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Jefferies is maintaining its Hold rating on shares of ULTA Salon (NASDAQ: ULTA) while raising its price target from $55 to $60.
The company released its quarterly results well above expectations with same-store-sales of 11.3 percent and a 170 bps increase in its gross margin. EPS for the quarter was $0.38, $0.06 above the firms estimate.
ULTA offered its third quarter guidance with an EPS range of $0.36-$0.38, ahead of the consensus of $0.34. The company's guidance implies continued margin growth and same-store-sales growth of 6-8 percent.
The firm notes that ULTA Salon has a clear and strong growth plan which consists of 15-20 percent square foot growth annually, opening a third distribution center in
2012, introducing new prestige brands, continuing to improve its ongoing supply chain, enhancing the online platform to grow e-commerce, and transitioning to an updated loyalty program, which is expected to be completed in 2012.
An analyst at the Jefferies comments, "Despite strong fundamentals, we remain on the sidelines given ULTA's stock price is up 75% YTD vs. S&P -6%. We would be more comfortable recommending the stock at more reasonable valuations. Thus, we are forced to wait for a more attractive entry point before getting on board with this unique growth story."
The firm increased its Q3 and FY12 EPS estimates from $0.33 and $1.60 to $0.37 and $1.72. For 2013, Jefferies estimates EPS of $2.15.
For more ratings news on ULTA Salon click here and for the rating history of ULTA Salon click here.
Shares of ULTA Salon closed at $59.76 yesterday.
The company released its quarterly results well above expectations with same-store-sales of 11.3 percent and a 170 bps increase in its gross margin. EPS for the quarter was $0.38, $0.06 above the firms estimate.
ULTA offered its third quarter guidance with an EPS range of $0.36-$0.38, ahead of the consensus of $0.34. The company's guidance implies continued margin growth and same-store-sales growth of 6-8 percent.
The firm notes that ULTA Salon has a clear and strong growth plan which consists of 15-20 percent square foot growth annually, opening a third distribution center in
2012, introducing new prestige brands, continuing to improve its ongoing supply chain, enhancing the online platform to grow e-commerce, and transitioning to an updated loyalty program, which is expected to be completed in 2012.
An analyst at the Jefferies comments, "Despite strong fundamentals, we remain on the sidelines given ULTA's stock price is up 75% YTD vs. S&P -6%. We would be more comfortable recommending the stock at more reasonable valuations. Thus, we are forced to wait for a more attractive entry point before getting on board with this unique growth story."
The firm increased its Q3 and FY12 EPS estimates from $0.33 and $1.60 to $0.37 and $1.72. For 2013, Jefferies estimates EPS of $2.15.
For more ratings news on ULTA Salon click here and for the rating history of ULTA Salon click here.
Shares of ULTA Salon closed at $59.76 yesterday.
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