The cold light of day just hit beauty retailer Ulta Beauty (NASDAQ:ULTA), and its makeup is clearly askew. That much was clear with the nearly 15% loss that Ulta took in Wednesday afternoon’s trading, and most of it stems from remarks at the J.P. Morgan Retail Round Up Conference.
While at the conference, Ulta delivered some disastrous projections. A combination of surging credit card debt and interest rates—credit card average APR margins have never been this high, noted a report from consumerfinance.gov—is dragging on Ulta’s outlook for the quarter. Data points for consumers are “mixed” right now, Ulta noted, and it’s looking at sales landing at the lower end of earlier-released first-half guidance. That was enough to get investors in a panic and pulling out frantically.
Not Going Out Quietly
Ulta won’t be taking this lying down. It’s teamed up with Serena Williams to bring out the Wyn Beauty line of “inclusive makeup,” which will hopefully bring in Serena Williams fans. Further, the semi-annual beauty sale will likely contribute some gains, as on-the-fence shoppers get a little extra reason to shop thanks to some lowered prices. Still, there’s no doubt that economic conditions are weighing on shoppers’ decisions, and that will almost certainly depress sales until things finally start looking better for the broader economy.
What Is the Stock Price Forecast for Ulta Beauty?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on ULTA stock based on 13 Buys, seven Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After an 18.24% loss in its share price over the past year, the average ULTA price target of $589.38 per share implies 32.49% upside potential.
