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Raymond James cuts ULTA price target, retains Outperform rating

EditorNatashya Angelica
Published 04/03/2024, 12:29 PM
ULTA
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On Wednesday, Raymond James made adjustments to the price target for ULTA Salon (NASDAQ: ULTA), reducing it to $610 from the previous $630, while retaining an Outperform rating on the stock. This change comes amidst a day of losses for the company's shares, which the firm considers to be an excessive reaction by the market.

The analyst from Raymond James noted that the day's decline in ULTA's stock value was disproportionate, indicating a belief that the selloff was "overdone." This perspective was echoed in comments regarding the broader beauty sector's performance, suggesting that the market's response to recent events does not align with the firm's analysis.

In addition to ULTA Salon, Raymond James also reiterated its positive stance on other stocks within the beauty industry. The firm maintained its Strong Buy ratings for both Estée Lauder Companies Inc. (NYSE: EL) and e.l.f. Beauty, Inc. (NYSE: NYSE:ELF), as well as an Outperform rating for Coty Inc . (NYSE: NYSE:COTY).

The rating affirmations reflect confidence in the long-term prospects of these companies despite the current market sentiment. The analyst's conclusion underscores a continued endorsement of these beauty sector stocks, suggesting that the current market downturn may not be indicative of the companies' fundamental strengths.

Investors and market watchers will be observing the performance of ULTA Salon and other beauty stocks following this adjustment in price target and the analyst's comments on the sector's overall condition.

InvestingPro Insights

In light of the recent price target adjustment for ULTA Salon by Raymond James, it's worth considering the current financial metrics and market performance of the company. According to InvestingPro data, ULTA Salon has a market capitalization of $21.47 billion and is trading at a P/E ratio of 17.03, which is considered high in relation to its near-term earnings growth.

The company's revenue has grown by 9.78% over the last twelve months as of Q4 2024, with a gross profit margin of 42.95%, reflecting strong profitability.

InvestingPro Tips for ULTA Salon indicate that the stock generally trades with low price volatility and liquid assets exceed short-term obligations, suggesting financial stability. Moreover, the company has been profitable over the last twelve months and analysts predict it will remain profitable this year. Despite not paying a dividend, ULTA Salon has seen a significant price uptick over the last six months, with a 31.82% total return.

For investors seeking more in-depth analysis, there are additional tips available on InvestingPro, which can provide further guidance on ULTA Salon's financial health and market position. Use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription and unlock a wealth of information, including 20 more InvestingPro Tips for ULTA Salon.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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