Ulta Beauty's Q1 Comp Momentum Turns This Analyst Bullish, Plus 'Tariff Risk Is Low'

While the prestige and mass beauty industry segments in 2024 have rebounded, growth 7% and 3%, respectively, Ulta Beauty Inc ULTA is gaining back market share, according to Goldman Sachs.

The Ulta Beauty Analyst: Analyst Kate McShane upgraded the rating from Neutral to Buy, while raising the price target from $384 to $423.

The Ulta Beauty Thesis: The company's quarter-to-date trends appear to be in-line with the current comp guidance, "with some acceleration in sales observed recently," McShane said in the upgrade note.

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Ulta Beauty's monthly active users have been growing since November 2024, while February app downloads have risen by 9% year-over-year, she added.

"We believe competition could be less of a headwind with recent work pointing to improving trends for ULTA NPI v. Sephora," the analyst wrote.

Management's 2025 guidance could prove conservative, she stated.

"Finally, we note tariff risk is low for Ulta, while the stock has seen pressure but proved resilient during recessionary periods," McShane further said.

ULTA Price Action: Shares of Ulta Beauty had risen by 2.25% to $374.80 at the time of publication on Tuesday.

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