On Friday, Deutsche Bank updated its outlook on ULTA Salon (NASDAQ: ULTA), raising the price target to $636 from the previous $627 while maintaining a Buy rating on the shares. The firm believes that ULTA Salon is well-positioned for continued growth due to several strategic advantages and a strong consumer engagement in beauty categories.
According to the analyst from Deutsche Bank, ULTA Salon is expected to surpass its first half same-store sales (SSS) guidance, which predicts a low single-digit increase. This outlook is supported by consistent consumer engagement within the beauty sector. The analyst also highlighted ULTA's structural advantages, including its scale, well-developed digital channel, and growing high-margin revenue streams.
ULTA Salon's additional revenue avenues, such as UB Media and its partnership with Target (NYSE: TGT), are seen as key contributors to the company's financial strength. The analyst emphasized that these elements, combined with the company's efficiency gains from years of investment in IT and supply chain improvements, position ULTA for a positive earnings per share (EPS) revision cycle.
Deutsche's endorsement of ULTA Salon as one of its top picks reflects confidence in the company's market strategy and potential for future performance. The raised price target suggests that the bank expects ULTA's stock to continue its upward trajectory, underpinned by solid business fundamentals and strategic initiatives.
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