ULTA Salon (ULTA) Decline Viewed as Buying Opportunity - Wells Fargo
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Price: $410.55 -2.08%
Rating Summary:
20 Buy, 13 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
Rating Summary:
20 Buy, 13 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 13 | Down: 11 | New: 14
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Wells Fargo maintained an Outperform rating on ULTA Salon (NASDAQ: ULTA) with a price target of $113-$117. Analyst Evren Kopelman tied intraday weakness Wednesday to downward estimate revisions by a couple of analysts and recent news that ULTA's previous CEO Lyn Kirby invested in and will become the CEO of Beauty Brands.
"The potentially increasing competition could be weighing on ULTA stock, however, we note that ULTA has the first-mover advantage, and has spent years building relationships attracting iconic prestige cosmetic brands (like Lancome and Clinique) to its stores," said Kopelman.
"While ULTA is likely impacted by the overall weak traffic to shopping centers that many retailers highlighted over the past several days at the ICR XChange conference, we think the relative weakness in the stock could be a buying opportunity for a solid growth company with a consistent gross margin profile (lack of seasonal and fashion inventory)," he added. "Expectations are being lowered (consensus estimates are getting closer to the low end of guidance) and we think that ULTA's comp guidance of up 7-9% for Q4 2013 is not as demanding as it looks on the surface (which could be causing extra concern)."
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 $88.76 yesterday.
"The potentially increasing competition could be weighing on ULTA stock, however, we note that ULTA has the first-mover advantage, and has spent years building relationships attracting iconic prestige cosmetic brands (like Lancome and Clinique) to its stores," said Kopelman.
"While ULTA is likely impacted by the overall weak traffic to shopping centers that many retailers highlighted over the past several days at the ICR XChange conference, we think the relative weakness in the stock could be a buying opportunity for a solid growth company with a consistent gross margin profile (lack of seasonal and fashion inventory)," he added. "Expectations are being lowered (consensus estimates are getting closer to the low end of guidance) and we think that ULTA's comp guidance of up 7-9% for Q4 2013 is not as demanding as it looks on the surface (which could be causing extra concern)."
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 $88.76 yesterday.
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