Raymond James downgraded Ulta Beauty to Outperform from Strong Buy with a price target of $450, down from $500. The company’s Q2 miss and guidance revision were wider than anticipated, reflecting competitive and macro challenges, the analyst tells investors in a research note. While disappointing, Ulta’s outlook has now been de-risked, with comps improving in August versus July and the bulk of the rollout of Sephora doors in Kohl’s having now occurred, contends Raymond James. The firm cites a “more measured approach” for the downgrade but thinks its new estimates are achievable and potentially beatable if Ulta’s upcoming promotional events spur more traffic to store.
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