Lorraine Hutchinson, an analyst from Bank of America Securities, reiterated the Hold rating on Ulta Beauty. The associated price target was raised to $685.00.
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Lorraine Hutchinson has given his Hold rating due to a combination of factors tied to Ulta Beauty’s strengths and its investment needs going forward. She views Ulta’s commercial engine favorably, noting that marketing around product newness, an enhanced store experience, and a robust loyalty ecosystem are all effectively driving traffic, conversion, and customer retention. The recent strategic refinements in product launches under the new merchandising leadership, along with high-profile introductions like Rare Beauty, are expected to resonate particularly well with younger, trend-focused shoppers. Ulta’s large and highly engaged rewards base, now expanded to include younger teens with tailored benefits, further reinforces the company’s long-term customer pipeline.
At the same time, Hutchinson believes that sustaining this growth and defending Ulta’s position in a competitive beauty landscape will require ongoing, meaningful investment. These investments in marketing, store operations, digital capabilities, and services could limit margin expansion and temper upside in the near to medium term. As a result, even though she is comfortable with the company’s strong revenue trajectory and has raised her price objective to reflect updated earnings forecasts, she does not see a sufficiently compelling risk/reward profile to justify a more bullish stance. This balance of solid fundamentals against continued competitive and investment pressures underpins her Neutral (Hold) recommendation and valuation framework.