Ulta Beauty Gets A Price Target Boost From Oppenheimer Backed by Confidence In New CEO: Retail’s Not Yet Convinced

Oppenheimer said that progress under Ulta's Beauty turnaround plan is already visible, from solid in-store conditions to improved digital efforts with the recent launch of subscribe and save.

Ulta Beauty (ULTA) on Tuesday received a price target raise from Oppenheimer to $600 from $510, as the firm sounded “upbeat” about new CEO Kecia Steelman’s leadership.

Oppenheimer maintained an ‘outperform’ rating, according to TheFly. The brokerage noted that it remains very upbeat on Steelman’s leadership but still believes management's turnaround efforts remain in the very early stages.

Retail sentiment on the stock remains in the ‘bearish’ territory on Stocktwits, while the message volume on Ulta Beauty was at ‘normal’ levels.

Steelman was named CEO of Ulta Beauty in January, succeeding Dave Kimbell, who was retiring. The move came at a time when beauty companies in the United States are seeing a slowdown in demand for high-end skincare and cosmetics. Progress under Ulta's Beauty turnaround plan is already visible from solid in-store conditions to improved digital efforts with the recent launch of subscribe and save, Oppenheimer added.

The brokerage believes that, based on the second-quarter print, there is potential for another beat, and management may now be compelled to raise fiscal 2025 guidance more meaningfully. Ulta Beauty is expected to post second-quarter revenue of $2.65 billion and earnings per share (EPS) of $4.98, according to data compiled by Fiscal AI. The company is set to report quarterly earnings on August 28.

A user on Stocktwits noted that increasing disposable income may drive stronger demand for luxury items.

Ulta Beauty stock has gained nearly 15% so far this year and jumped over 50% in the last 12 months.

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