Barclays downgraded Ulta Beauty to Equal Weight from Overweight with a price target of $434, down from $612. The analyst cites increased competition and distribution points, specifically in off-mall brick-and-mortar within the company’s beauty segment, material slowing in comps year-to-date with earlier and faster slowing in the beauty segment, elevated promotions based on the firm’s proprietary promotional checks, and potential risk to its second half of 2024 guidance for the downgrade. Barclays is moving to the sidelines with a more cautious view on Ulta Beauty in the near term. Longer term, Ulta is one of two specialty multi-brand retailers with a best-in-class business model in the secularly growing beauty segment, the firm adds.
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