Zacks Investment Research Downgrades Ulta Beauty Inc. (ULTA) to Sell

Ulta Beauty Inc. (NASDAQ:ULTA) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a research report issued to clients and investors on Tuesday, August 8th.

According to Zacks, “Ulta Beauty has underperformed the industry in the last three months. This could be largely accountable to a slowing U.S. beauty market, which has become challenging since January. The mass market and department stores have been pressurized, which remains a concern for Ulta Beauty. Moreover, the company remains on the backfoot due to limited global brand awareness, alongside challenges related to cheaper alternatives and changing consumer preference. Nevertheless, we commend Ulta Beauty’s splendid surprise history. The company has been gaining from constant merchandise innovations, solid marketing initiatives, outstanding e-Commerce improvement and continued progress at the salon operations. Notably, the company recorded a 70.9% growth in e-Commerce sales in first-quarter fiscal 2017. Further, the company’s raised fiscal 2017 view bodes well. Estimates have been stable lately, ahead of the company's second quarter earnings.”

Several other equities analysts have also recently commented on ULTA. Loop Capital upgraded shares of Ulta Beauty from a “hold” rating to a “buy” rating and boosted their price target for the company from $285.00 to $350.00 in a report on Monday, April 10th. Jefferies Group LLC set a $266.00 price target on shares of Ulta Beauty and gave the company a “hold” rating in a report on Thursday, April 27th. Piper Jaffray Companies restated an “overweight” rating and set a $314.00 price target on shares of Ulta Beauty in a report on Monday, May 1st. Royal Bank Of Canada restated a “hold” rating on shares of Ulta Beauty in a report on Tuesday, May 2nd. Finally, Oppenheimer Holdings, Inc. restated an “outperform” rating and set a $330.00 price target (up from $315.00) on shares of Ulta Beauty in a report on Wednesday, May 17th. Two investment analysts have rated the stock with a sell rating, ten have issued a hold rating and twelve have assigned a buy rating to the stock. Ulta Beauty presently has an average rating of “Hold” and a consensus price target of $319.05.

Ulta Beauty (ULTA) opened at 244.20 on Tuesday. Ulta Beauty has a 12 month low of $225.13 and a 12 month high of $314.86. The company has a 50 day moving average price of $256.00 and a 200 day moving average price of $278.55. The stock has a market capitalization of $15.15 billion, a price-to-earnings ratio of 34.29 and a beta of 0.57.

Ulta Beauty (NASDAQ:ULTA) last posted its quarterly earnings data on Thursday, May 25th. The specialty retailer reported $1.91 earnings per share for the quarter, topping the consensus estimate of $1.79 by $0.12. Ulta Beauty had a net margin of 8.75% and a return on equity of 28.91%. The firm had revenue of $1.31 billion for the quarter, compared to analysts’ expectations of $1.28 billion. During the same period in the previous year, the company posted $1.45 EPS. The company’s quarterly revenue was up 22.4% compared to the same quarter last year. Equities research analysts predict that Ulta Beauty will post $8.32 earnings per share for the current year.

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In other news, Director Robert F. Diromualdo sold 20,000 shares of the business’s stock in a transaction dated Friday, June 2nd. The shares were sold at an average price of $309.05, for a total transaction of $6,181,000.00. Following the transaction, the director now owns 4,717 shares in the company, valued at approximately $1,457,788.85. The transaction was disclosed in a legal filing with the SEC, which is accessible through the SEC website. Also, Director Catherine Ann Halligan sold 500 shares of the business’s stock in a transaction dated Monday, June 5th. The stock was sold at an average price of $312.36, for a total transaction of $156,180.00. Following the transaction, the director now owns 4,126 shares in the company, valued at approximately $1,288,797.36. The disclosure for this sale can be found here. 5.20% of the stock is owned by insiders.

Hedge funds and other institutional investors have recently bought and sold shares of the company. Fifth Third Bancorp increased its position in Ulta Beauty by 11.2% in the first quarter. Fifth Third Bancorp now owns 398 shares of the specialty retailer’s stock valued at $114,000 after buying an additional 40 shares during the last quarter. Crestwood Advisors Group LLC bought a new position in Ulta Beauty during the first quarter valued at about $120,000. Sun Life Financial INC increased its position in Ulta Beauty by 4,655.6% in the second quarter. Sun Life Financial INC now owns 428 shares of the specialty retailer’s stock valued at $123,000 after buying an additional 419 shares during the last quarter. FNY Partners Fund LP bought a new position in Ulta Beauty during the first quarter valued at about $142,000. Finally, Lazard Asset Management LLC bought a new position in Ulta Beauty during the second quarter valued at about $157,000. Institutional investors own 85.68% of the company’s stock.

Ulta Beauty Company Profile

Ulta Beauty, Inc is a holding company for the Ulta Beauty group of companies. The Company is a beauty retailer. The Company offers cosmetics, fragrance, skin, hair care products and salon services. The Company offers approximately 20,000 products from over 500 beauty brands across all categories, including the Company’s own private label.

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