Ulta Beauty upgraded to Buy at BofA on improved earnings flywheel

As previously reported, BofA analyst Lorraine Hutchinson upgraded Ulta Beauty (ULTA) to Buy from Neutral with a $685 price target Guidance for only modest leverage in FY26 has sent the stock 26% off its 52-week high, but the pullback has “brought elevated investor expectations down to earth” and creates an “opportunity to invest in a high quality compounder at a discount to peers,” the analyst tells investors. The firm’s recent work gives it more confidence that Ulta is using investments to “build a flywheel to drive growth instead of just running on a treadmill to keep up,” the analyst added.