Lorraine Hutchinson, an analyst from Bank of America Securities, reiterated the Hold rating on Ulta Beauty. The associated price target is $610.00.
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Lorraine Hutchinson’s rating is based on Ulta Beauty’s recent financial performance and strategic investments. The company reported a strong earnings beat and raised its guidance, indicating a recovery in sales. However, there are concerns about the medium-term margin goals, particularly due to increased SG&A spending to address competitive pressures, which keeps the rating at Hold.
Despite a positive start to the holiday season and better-than-expected pricing strategies, the long-term EBIT margin target remains a concern. The increased SG&A expenses, driven by investments in store payroll and the acquisition of SpaceNK, suggest potential challenges in achieving margin expansion. These factors contribute to the cautious outlook and the decision to maintain a Hold rating.
Based on the recent corporate insider activity of 25 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of ULTA in relation to earlier this year.