Ulta Beauty Underpromises, Overdelivers: 4 Analysts Raise Price Targets After Q4 Print

Shares of Ulta Beauty Inc ULTA rose in early trading on Friday, after the company reported better-than-expected fourth-quarter earnings.

• BMO Capital Markets analyst Simeon Siegel maintained a Market Perform rating, while raising the price target from $390 to $510.
• Credit Suisse analyst Michael Binetti reaffirmed an Outperform rating, while raising the price target from $535 to $580.
• Telsey Advisory analyst Dana Telsey maintained an Outperform rating, while raising the price target from $575 to $600.
• Loop Capital analyst Anthony Chukumba reiterated a Hold rating, while raising the price target from $500 to $520.

Check out other analyst stock ratings.

BMO Capital Markets

• The company reported “a meaningful (but fairly expected)” revenue and earnings beat, “as better sales flowed through at in-line GMs (likely somewhat disappointing) and much better SGA,” Siegel said in a note.
• “Looking ahead, FY revenues and EPS were guided above the Street,” he added. “ULTA remains among one of the best growth stories in retail; although at this point, we believe this is reflected in shares,” the analyst further wrote.

Credit Suisse

• “The current momentum of the business remains very strong, and with 2023 SSS guided to +4-5% (which conservatively embeds decelerating stacked comps), we see upside to guidance,” Binetti wrote in a note.
• “The company guided 2023 EPS above the Street, at $24.70-$25.40 (Street $24.38),” the analyst said. “But with momentum at the core above that today—and with increasing contributions from margin-accretive revenue streams like UB Media/ Target—we see upside for the year,” he added.

Telsey Advisory Group On Ulta Beauty

• “The significant earnings upside was driven by stronger topline growth and tighter expense control, while gross margin was in-line,” Telsey said. “The better-than-expected topline growth reflected a 13.6% increase in transactions along with a 1.8% increase in average ticket, as well as double-digit growth across all major categories,” she added.
• “Gross margin came in flat YoY at 37.6%, in-line with the consensus as fixed cost leverage, a favorable mix shift, and growth in other revenue was offset by higher inventory shrink,” the analyst further stated.

Loop Capital

• “Ulta Beauty wrapped up F2022 on a high note in our opinion, including an eighth consecutive quarter of double-digit percentage comparable sales growth, YoY operating margin expansion, and a "country mile" earnings beat to consensus expectations in F4Q 2022,” Chukumba wrote.
• “We were also encouraged by management's F2023 guidance—particularly given the company's long history of 'underpromising and overdelivering',” he added.

ULTA Price Action: Shares of Ulta Beauty had declined by 2.11% to $530.90 at the time of publication Friday.