Ulta Beauty (ULTA) Downgraded by Zacks Investment Research to Sell

Zacks Investment Research cut shares of Ulta Beauty (NASDAQ:ULTA) from a hold rating to a sell rating in a research report released on Friday.

According to Zacks, “Ulta Beauty surpassed the industry in the past three months. However, it might derail in the near term owing to higher expenses that are hurting margins. It expects modest deleverage in operating margin in first-half fiscal 2019. Moreover, SG&A expenses are projected to deleverage due to higher store labor costs and spending in growth initiatives. Higher costs of investments toward digital channels, salon services, infrastructure, personalization efforts and initiatives to enhance customer experience are also likely to increase corporate overheads. However, the company delivered solid fourth-quarter fiscal 2018 results, driven by strong holiday season. Strength in the retail business, solid store-expansion efforts, adoption of revenue standard and market share gains aided performance. Robust performance of mass cosmetics, boutique, skincare and fragrance remained tailwinds. Management also issued an encouraging outlook for fiscal 2019.”

A number of other equities analysts have also weighed in on the stock. BidaskClub lowered shares of Ulta Beauty from a buy rating to a hold rating in a research report on Saturday, December 8th. Wells Fargo & Co lowered their price objective on shares of Ulta Beauty from $328.00 to $280.00 and set an outperform rating on the stock in a research report on Wednesday, January 2nd. Loop Capital lifted their price objective on shares of Ulta Beauty from $265.00 to $300.00 and gave the company a hold rating in a research report on Monday, March 4th. Nomura set a $305.00 price objective on shares of Ulta Beauty and gave the company a buy rating in a research report on Monday, November 26th. Finally, Morgan Stanley set a $330.00 price objective on shares of Ulta Beauty and gave the company a buy rating in a research report on Sunday, December 9th. One research analyst has rated the stock with a sell rating, six have given a hold rating, sixteen have issued a buy rating and two have assigned a strong buy rating to the stock. The company has an average rating of Buy and a consensus price target of $317.05.

NASDAQ:ULTA opened at $342.22 on Friday. Ulta Beauty has a 1-year low of $199.15 and a 1-year high of $345.24. The firm has a market capitalization of $18.47 billion, a P/E ratio of 41.94, a PEG ratio of 1.33 and a beta of 1.01.

Ulta Beauty (NASDAQ:ULTA) last posted its quarterly earnings data on Thursday, March 14th. The specialty retailer reported $3.61 earnings per share for the quarter, beating analysts’ consensus estimates of $3.56 by $0.05. Ulta Beauty had a net margin of 9.99% and a return on equity of 33.75%. The firm had revenue of $2.12 billion for the quarter, compared to analyst estimates of $2.11 billion. During the same period last year, the firm posted $2.75 EPS. Ulta Beauty’s quarterly revenue was up 9.7% on a year-over-year basis. As a group, equities analysts anticipate that Ulta Beauty will post 10.82 earnings per share for the current year.

Several hedge funds and other institutional investors have recently modified their holdings of ULTA. Legacy Financial Advisors Inc. boosted its position in shares of Ulta Beauty by 1,270.0% during the 4th quarter. Legacy Financial Advisors Inc. now owns 137 shares of the specialty retailer’s stock worth $34,000 after purchasing an additional 127 shares in the last quarter. Bronfman E.L. Rothschild L.P. boosted its position in shares of Ulta Beauty by 74.2% in the 4th quarter. Bronfman E.L. Rothschild L.P. now owns 162 shares of the specialty retailer’s stock worth $40,000 after buying an additional 69 shares in the last quarter. Ipswich Investment Management Co. Inc. purchased a new stake in shares of Ulta Beauty in the 4th quarter worth about $53,000. Claybrook Capital LLC purchased a new stake in shares of Ulta Beauty in the 4th quarter worth about $62,000. Finally, Executive Wealth Management LLC purchased a new stake in shares of Ulta Beauty in the 4th quarter worth about $64,000. Institutional investors own 89.72% of the company’s stock.

About Ulta Beauty

Ulta Beauty, Inc operates as a beauty retailer in the United States. The company's stores offer cosmetics, fragrances, haircare and skincare products, bath and body products, and salon styling tools; salon services, including hair, skin, and brow services; and others, including nail products and accessories.

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