Analyst Oliver Chen of TD Cowen maintained a Hold rating on Ulta Beauty (ULTA – Research Report), reducing the price target to $400.00.
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Oliver Chen has given his Hold rating due to a combination of factors impacting Ulta Beauty’s current and future performance. The company’s recent earnings per share exceeded expectations, but its forward guidance was less optimistic, reflecting challenges in the competitive landscape. Increased competition from Sephora and Amazon necessitates a focus on exclusivity and innovation, areas where Ulta may currently lag.
Additionally, Ulta is navigating a transitional period marked by management changes and a challenging macroeconomic environment, which could hinder growth. The company’s guidance for fiscal year 2025 is cautious, with limited upside potential, and ongoing competitive pressures are expected to continue affecting margins. In the long term, Ulta needs to strengthen its position as a destination for new and emerging brands and better leverage service offerings to compete with convenience-focused alternatives like Amazon and Walmart.