DA Davidson Out Positive on ULTA Salon (ULTA): 'Another Buying Opportunity'
DA Davidson analyst Michael Baker reiterated a Buy rating and $595.00 price target on ULTA Salon (NASDAQ: ULTA).
The analyst comments "Since bottoming last fall, ULTA has been a big outperformer, up 45% since mid-November, which is when discretionary retail started to outperform. With the 2024 outlook including better comps but a lower EPS, the stock is giving something back in the premarket. There were a number of positives in the quarter, and some negatives. Better shrink but higher promotions offset. But, perhaps most importantly we think some competitive pressures will roll off as Kohls Sephora growth likely peaked in 2023 and will be less of an issue in 2024. Also investment spending is rolling off as well and newness should be better in 2024. Ulta remains a “Best-of-Breed Bison” name which we see as a long term winner, and would thus use any weakness as an entry point. We maintain our BUY rating and our price target is $595, based on 20x our 2025 EPS estimate and backed up by our discounted cash flow analysis."
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Shares of ULTA Salon closed at $565.44 yesterday.