Morgan Stanley Sees a Good ULTA Salon (ULTA) Setup Into Analyst Day, Potentially $2 in EPS Upside
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Morgan Stanley analyst Simeon Gutman reiterated an Equalweight rating and $430.00 price target on ULTA Salon (NASDAQ: ULTA) but sees a positive setup with upside ahead of the company's analyst day on Tuesday, October 19th.
The analyst stated "'21 estimates still have room to run. We think ULTA could reach $17+ in EPS vs $15 consensus, given reduced promotional activity and strong sales in 1H'21 (which featured Q2 sales/EPS beats of ~10%/~75% and revenue up ~20% on a 2Y basis). Near-term upside to numbers could keep the stock working; we think our $430 PT (13% upside from its current price) is reasonable. The larger debate in the medium-term centers on ULTA's multiple as its business matures. Square footage growth is moderating (~3% vs ~12% historically) and will contribute less to earnings growth in the future."
Shares of ULTA Salon closed at $386.92 yesterday.
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