William Blair analyst Dylan Carden has maintained their neutral stance on ULTA stock, giving a Hold rating on August 6.
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Dylan Carden has given his Hold rating due to a combination of factors surrounding Ulta Beauty’s strategic decisions and their potential impact on financial performance. The recent announcement that Ulta and Target will not renew their shop-in-shop partnership beyond August 2026 is a significant consideration. This partnership, which has been instrumental in expanding Ulta’s reach and boosting its rewards membership, will continue until its scheduled end, but its eventual conclusion could affect Ulta’s revenue streams.
While the partnership contributes a modest portion to Ulta’s overall revenue and operating income, the decision to not renew suggests a shift in strategic focus. Ulta’s new CEO, Kecia Steelman, aims to optimize existing locations rather than expand further, indicating a cautious approach to growth. This strategic pivot, along with the limited immediate impact on financials due to the partnership’s continuation until 2026, supports the Hold rating as the company navigates these changes and seeks efficiencies in its operations.
In another report released on August 6, Barclays also maintained a Hold rating on the stock with a $518.00 price target.