Canaccord starts Ulta Beauty with a Buy, sees continued share gains

As previously reported, Canaccord analyst Susan Anderson initiated coverage of Ulta Beauty with a Buy rating and $622 price target. The firm believes the beauty category has shown resilience and should outperform even in a weaker macro environment and expects Ulta to continue to gain share with its "strong" loyalty program, continued prestige and luxury expansion and omnichannel and social media presence. Ulta management guided same-store sales to be up by a high-single digit percentage in the first half, but the firm’s cosmetic store sales model implies comps continue to trend in the double-digit range, the analyst added.