Citi analyst Kelly Crago maintained a Hold rating on Ulta Beauty yesterday and set a price target of $550.00.
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Kelly Crago has given his Hold rating due to a combination of factors influencing Ulta Beauty’s current market position. The company’s second quarter earnings per share significantly exceeded expectations, driven by stronger comparable sales and gross margins. However, management plans to increase investment spending in the second half of the year to support long-term growth initiatives, which may impact margins.
Despite the positive performance and strong product pipeline, the stock is trading at a price-to-earnings multiple that suggests a balanced risk and reward scenario. While the company shows potential for differentiation through its brand assortment and marketing strategies, the anticipated investment spending and the current valuation lead to a cautious outlook. Therefore, the Hold rating reflects a view that the stock’s current price fairly represents its near-term prospects.
According to TipRanks, Crago is a 3-star analyst with an average return of 4.4% and a 52.17% success rate.
In another report released today, TD Cowen also assigned a Hold rating to the stock with a $600.00 price target.