By Michael Elkins
Oppenheimer reiterated an Outperform rating on Ulta Beauty Inc (NASDAQ:ULTA), maintaining the beauty supplier as a “Top Pick” and raised their price target on the stock to $600.00 (from $535.00) ahead of the company’s 4Q earnings release.
Analysts wrote in a note, “We continue to see an attractive upside case fueled by favorable category dynamics, benefits from company initiatives, pricing contributions to ticket, and continued strong execution from the ULTA management team. Although compares and the macro backdrop are collectively more difficult year over year, we believe management can continue to drive share gains and deliver comp growth in at least the +3–5% range. For the Q4 print, we expect another material beat and conservative guidance from the ULTA management team consistent with historical practices. ULTA remains a top pick for us.”
In 2022, ULTA shares increased 14%, outperforming a decline of 19% in the S&P 500. Year to date, shares are up 12% vs. an increase of 8% in the S&P 500.
Oppenheimer lifted 4Q comp estimates to +10% from +7% vs. a +7.8% consensus figure. On the bottom line, they expect 4Q EPS of at least $6.00 vs. a consensus figure of $5.56. The analysts expect makeup sales to end FY22 up >15% vs. pre-pandemic FY19 levels compared to a total sales increase of >35% during that same period. They expect ULTA to continue to benefit from an ongoing makeup recovery as consumers return to pre-pandemic behaviors and from a strong innovation/trend cycle.
Shares of ULTA are up 0.85% on Thursday.