Specialty beauty retailer Ulta Beauty (ULTA) is scheduled to report its results for the fourth quarter of Fiscal 2024 after the market closes on Thursday, March 13. ULTA stock has declined 21% so far this year due to concerns about the impact of macro pressures on consumers’ discretionary spending and competitive pressures. Analysts expect Ulta Beauty to report a 12% year-over-year decline in its Q4 FY24 EPS (earnings per share) to $7.13 due to lower revenue and margin pressures.
Further, Wall Street expects revenue to come in at $3.47 billion, reflecting a 2.3% year-over-year decline.
Analysts’ Views Ahead of Ulta Beauty’s Q4 Earnings
Heading into Q4 results, JPMorgan analyst Christopher Horvers reiterated a Buy rating on Ulta Beauty stock with a price target of $480 due to a combination of factors that reinforce the beauty retailer’s strong market position and growth potential. The five-star analyst expects the company to benefit from its unique offerings of both mass and prestige products, which positions it well for market share gains. Additionally, Horvers is confident about the company’s performance and potential for valuation above normal market levels.
Likewise, Morgan Stanley analyst Simeon Gutman reiterated a Buy rating on Ulta Beauty stock with a price target of $500. The analyst noted that the stock’s recent underperformance compared to the S&P 500 (SPX) reflects weaker beauty industry trends, an unimpressive FY25 outlook, and no improvement in quarter-to-date Q1 FY25 sales.
The four-star analyst thinks that Ulta’s Q1 comparable sales may be trending negative compared to the Street’s consensus growth estimate of 0.5%. However, Gutman remains bullish as he thinks that as long as this slowdown is due to macro challenges and not market share loss, Ulta’s comparable sales should improve as weather and consumer sentiment normalize and result in 1% to 2% comps growth in FY25.
Options Traders Anticipate Major Move on ULTA’s Q4 Earnings
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting about 9% move in either direction in reaction to Ulta Beauty’s Q4 FY24 results.
Is ULTA Stock a Buy, Sell, or Hold?
Wall Street is cautiously optimistic on Ulta Beauty stock, with a Moderate Buy consensus rating based on nine Buys, nine Holds, and one Sell recommendation. The average ULTA stock price target of $468.58 implies 36.7% upside potential.
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