Goldman Comments on ULTA Salon's (ULTA) Q4
Goldman Sachs maintained a Neutral rating on ULTA Salon (NASDAQ: ULTA) with a price target of $107.00. Comments follow Q4 results. In the view of analyst Matthew J. Fassler, takeaways were positive.
"ULTA joined the select group of retailers that delivered on original 4Q2013 expectations, with solid 9.2% SSS growth and in-line earnings (better than lowered Street forecasts)," said Fassler. "Our net takeaways for ULTA are favorable. The model is intact despite a tough 2013; top-line has traction; and, importantly, the firm's very real need for investment in supply chain – still on the come – and other core functions, once a disputed notion, is now baked into guidance and investor expectations."
"At this stage, the biggest question is valuation, which we think leaves room for some upside," added the analyst. "We cut 2014 EPS by $0.15 to $3.75 on incremental investments and a lower base case sales assumption; we cut 2015 EPS by $0.25 to $4.40, and 2016 by $0.40 to $5.25 on similar drivers. We believe the stock's anticipated long-run growth rate is in the process of landing in the high-teens after a period of perceived 25%-30% growth potential."
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 $89.51 yesterday, with a 52 week range of $72.51-$132.72.
"ULTA joined the select group of retailers that delivered on original 4Q2013 expectations, with solid 9.2% SSS growth and in-line earnings (better than lowered Street forecasts)," said Fassler. "Our net takeaways for ULTA are favorable. The model is intact despite a tough 2013; top-line has traction; and, importantly, the firm's very real need for investment in supply chain – still on the come – and other core functions, once a disputed notion, is now baked into guidance and investor expectations."
"At this stage, the biggest question is valuation, which we think leaves room for some upside," added the analyst. "We cut 2014 EPS by $0.15 to $3.75 on incremental investments and a lower base case sales assumption; we cut 2015 EPS by $0.25 to $4.40, and 2016 by $0.40 to $5.25 on similar drivers. We believe the stock's anticipated long-run growth rate is in the process of landing in the high-teens after a period of perceived 25%-30% growth potential."
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 $89.51 yesterday, with a 52 week range of $72.51-$132.72.