Zacks Investment Research Lowers Ulta Beauty (ULTA) to Hold

Zacks Investment Research lowered shares of Ulta Beauty (NASDAQ:ULTA) from a buy rating to a hold rating in a research note released on Thursday morning.

According to Zacks, “Ulta Beauty outpaced the industry in the past three months owing to a solid sales trend. While fourth-quarter fiscal 2017 sales were in line with estimates, it delivered sales beat in 15 of the last 17 quarters. Further, the company is gaining from its effective marketing initiatives, sturdy e-commerce business and superb salon operations. Notably, Ulta Beauty recorded 60.4% growth in e-commerce sales, which helped it to stand out amid intense online competition. Market share gains and benefits from the loyalty program are also aiding the results. However, the company’s margins were under pressure due to deleveraged merchandise margins, one-time bonus payment related to tax reforms and higher SG&A expenses. Further, operating margin is expected to decline at a modest rate in fiscal 2018. Nonetheless, management issued bullish earnings and sales outlook for the fiscal year. Estimates are trendind up ahead of first quarter earnings.”

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ULTA has been the topic of a number of other reports. Piper Jaffray Companies set a $268.00 target price on shares of Ulta Beauty and gave the stock a buy rating in a research note on Tuesday, May 29th. Guggenheim raised shares of Ulta Beauty from a neutral rating to a buy rating and set a $260.00 target price on the stock in a research note on Monday, April 16th. BidaskClub raised shares of Ulta Beauty from a hold rating to a buy rating in a research note on Wednesday, April 18th. Morgan Stanley reaffirmed a buy rating on shares of Ulta Beauty in a research note on Wednesday, March 7th. Finally, ValuEngine downgraded shares of Ulta Beauty from a hold rating to a sell rating in a research note on Thursday, March 1st. One research analyst has rated the stock with a sell rating, nine have given a hold rating, seventeen have issued a buy rating and one has given a strong buy rating to the company’s stock. Ulta Beauty presently has an average rating of Buy and a consensus price target of $263.17.

Ulta Beauty opened at $245.15 on Thursday, MarketBeat.com reports. Ulta Beauty has a twelve month low of $187.96 and a twelve month high of $314.86. The stock has a market capitalization of $15.34 billion, a PE ratio of 30.04, a price-to-earnings-growth ratio of 1.27 and a beta of 0.64.

Ulta Beauty (NASDAQ:ULTA) last issued its earnings results on Thursday, May 31st. The specialty retailer reported $2.70 EPS for the quarter, topping analysts’ consensus estimates of $2.48 by $0.22. Ulta Beauty had a net margin of 9.44% and a return on equity of 30.40%. The company had revenue of $1.54 billion for the quarter, compared to the consensus estimate of $1.52 billion. During the same period in the previous year, the firm earned $1.91 earnings per share. Ulta Beauty’s quarterly revenue was up 17.4% compared to the same quarter last year. research analysts anticipate that Ulta Beauty will post 10.77 EPS for the current year.

Ulta Beauty declared that its Board of Directors has authorized a share repurchase plan on Thursday, March 15th that allows the company to repurchase $625.00 million in shares. This repurchase authorization allows the specialty retailer to buy shares of its stock through open market purchases. Stock repurchase plans are typically a sign that the company’s board believes its stock is undervalued.

In related news, CEO Mary N. Dillon sold 16,286 shares of Ulta Beauty stock in a transaction that occurred on Thursday, April 5th. The shares were sold at an average price of $206.99, for a total value of $3,371,039.14. Following the completion of the transaction, the chief executive officer now owns 100,984 shares in the company, valued at $20,902,678.16. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is available at the SEC website. Also, Director Dennis K. Eck sold 22,000 shares of Ulta Beauty stock in a transaction that occurred on Tuesday, April 10th. The shares were sold at an average price of $216.82, for a total transaction of $4,770,040.00. Following the completion of the transaction, the director now owns 427,333 shares of the company’s stock, valued at approximately $92,654,341.06. The disclosure for this sale can be found here. Insiders sold 41,286 shares of company stock valued at $8,826,129 in the last 90 days. Company insiders own 5.60% of the company’s stock.

Several hedge funds have recently made changes to their positions in ULTA. Captrust Financial Advisors acquired a new position in shares of Ulta Beauty in the fourth quarter valued at approximately $153,000. Optimum Investment Advisors purchased a new position in Ulta Beauty in the first quarter worth approximately $163,000. Diversified Trust Co purchased a new position in Ulta Beauty in the first quarter worth approximately $206,000. ACG Wealth purchased a new position in Ulta Beauty in the fourth quarter worth approximately $216,000. Finally, Sapphire Star Partners LP purchased a new position in Ulta Beauty in the fourth quarter worth approximately $224,000. Hedge funds and other institutional investors own 89.84% of the company’s stock.

About Ulta Beauty

Ulta Beauty, Inc operates as a beauty retailer in the United States. The company's stores offer cosmetics, fragrances, haircare and skincare products, bath and body products, and salon styling tools; salon services, including hair, skin, and brow services; and others, including nail products and accessories.

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Analyst Recommendations for Ulta Beauty (NASDAQ:ULTA)

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