Ulta Beauty Is A Recession-Proof 'Arms Dealer' For Today's On-Screen Reality: Josh Brown

Ulta Beauty Inc ULTA was featured as the call of the day Tuesday on CNBC's "Fast Money Halftime Report."

What Happened: Canaccord Genuity analyst Susan Anderson initiated coverage on Ulta with a Buy rating and set a $622 price target, noting the company is well positioned in the beauty category, which should outperform even against a tougher macro backdrop. 

Why It Matters: Ritholtz Wealth Management's Josh Brown agreed with Anderson and even went as far as to call the stock "recession proof."

In today's world, individuals are increasingly concerned with their appearance on platforms like Zoom Video Communications Inc ZM, TikTok and Meta Platforms Inc's META Instagram, Brown said, adding that Ulta Beauty stands to benefit as a result.

"That's just not gonna change. And Ulta is the arms dealer to the new reality that we all live in, which is hybrid, which is on-screen all the time," he said. 

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The beauty of it is Ulta is one of the favorites in the space and it likely has room to go higher given its valuation, he said. 

Ulta has a forward price-to-earnings ratio of 19 and earnings are expected to grow 10%, Brown said: "I don't know why that couldn't be exceeded."

He told CNBC that despite its climb over the last year, the stock continues to look well positioned.

"I think it's a popular trade that could stay popular," Brown said.

ULTA Price Action: Ulta Beauty shares are up approximately 30% over the last year.

The stock was up 1.65% at $529.05 Tuesday afternoon, according to Benzinga Pro.

Photo: Lubov Lisitsa from Pixabay.