Bank of America Upgrades Ulta Beauty Stock to Buy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: May 10 2026
0mins
Source: Yahoo Finance
- Investment Appeal from Price Drop: Bank of America upgraded Ulta Beauty's stock rating from 'Neutral' to 'Buy' with a price target of $685, noting that the stock's over 13% year-to-date decline presents an attractive entry point, indicating the company's continued appeal relative to peers.
- Long-Term Competitive Advantages: Analyst Lorraine Hutchinson highlighted that Ulta Beauty's investment cycle is developing long-term competitive advantages, with expected improvements in cost discipline driving operating income growth and healthier free cash flow, thereby strengthening the company's market position.
- FY 2026 Performance Guidance: Ulta Beauty anticipates net sales growth of 6.0% to 7.0% and diluted EPS growth of 9.4% to 11.4% for FY 2026, reflecting the company's confidence in its future performance and positive growth outlook.
- Capital Return Strategy: The company returned $890.5 million of capital to shareholders through planned share repurchases, demonstrating its commitment to shareholder returns while also reflecting robust cash flow management.
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Analyst Views on ULTA
Wall Street analysts forecast ULTA stock price to rise
22 Analyst Rating
15 Buy
6 Hold
1 Sell
Moderate Buy
Current: 504.050
Low
450.00
Averages
647.83
High
780.00
Current: 504.050
Low
450.00
Averages
647.83
High
780.00
About ULTA
Ulta Beauty, Inc. is a specialty United States beauty retailer and the premier beauty destination for cosmetics, fragrance, skincare products, haircare products and salon services. The Company operates approximately 1,451 retail stores across 50 states and distributes products through its Website, which includes a collection of tips, tutorials, and social content. The Company’s business includes a differentiated assortment of approximately 29,000 beauty products across a variety of categories and price points, as well as a variety of beauty services, including salon services, in more than 1,400 stores predominantly located in convenient, high-traffic locations. It also offers digital experiences delivered through its Website, Ulta.com, and its mobile applications. The Company’s brands include Ulta Beauty Collection, about-face, Ariana Grande, CHANEL, FENTY BEAUTY by Rihanna, It Cosmetics, LolaVie, OUAI, PAT McGRATH LABS, Tula, and NYX Professional Makeup.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Long-Term Competitive Advantages: Analyst Lorraine Hutchinson highlighted that Ulta Beauty's investment cycle is developing long-term competitive advantages, with expected improvements in cost discipline driving operating income growth and healthier free cash flow, thereby strengthening the company's market position.
- FY 2026 Performance Guidance: Ulta Beauty anticipates net sales growth of 6.0% to 7.0% and diluted EPS growth of 9.4% to 11.4% for FY 2026, reflecting the company's confidence in its future performance and positive growth outlook.
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- Long-Term Competitive Advantages: Analyst Lorraine Hutchinson highlighted that Ulta Beauty's investment cycle is developing long-term competitive advantages, with expected improvements in cost discipline driving operating income growth and healthier free cash flow, thereby strengthening the company's market position.
- FY 2026 Performance Guidance: Ulta Beauty anticipates net sales growth of 6.0% to 7.0% and diluted EPS growth of 9.4% to 11.4% for FY 2026, reflecting the company's confidence in its future performance and positive growth outlook.
- Capital Return Strategy: The company returned $890.5 million of capital to shareholders through planned share repurchases, demonstrating its commitment to shareholder returns while also reflecting robust cash flow management.
See More
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- Baby Boutique Rollout: Target has launched baby boutiques in approximately 200 stores, allowing customers to experience high-end brands like UPPAbaby firsthand, aiming to attract busy family customers and enhance market share.
- Market Share Challenges: Despite holding a 17.6% share in the baby products market, Target has seen a decline compared to Walmart's 27% and Amazon's 24.4%, indicating increased competitive pressure.
- Sales Growth Expectations: Target anticipates a year-over-year net sales increase of about 2% this year, with growth expected in every quarter, signaling efforts to reverse the sales slump experienced over the past four quarters.
- Strategic Investment Plan: Target plans to invest approximately $5 billion in capital expenditures this fiscal year to improve store experiences and product quality, aiming to enhance customer loyalty and address competitive challenges.
See More
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- Partnership Expansion: Uber Eats has expanded its partnership with Ulta Beauty by adding over 1,500 Ulta stores to its marketplace, aiming to enhance consumer shopping convenience, especially ahead of Mother's Day, to meet immediate beauty product demands.
- Product Diversity: Consumers can now browse thousands of products from over 600 brands on Uber Eats, including makeup, skincare, and fragrances, with same-day delivery, thereby enhancing Ulta Beauty's digital sales channel and attracting more convenience-seeking customers.
- Market Impact: This collaboration not only enriches Uber Eats' retail offerings beyond traditional food delivery but also provides Ulta Beauty with a new digital platform to better reach consumers in a competitive market landscape.
- Stock Market Reaction: Despite Uber Technologies' stock falling 3.2% and Ulta Beauty's down 0.5% on Thursday, the long-term strategic significance of this partnership lies in increasing market share and customer loyalty for both companies.
See More
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- Ulta Beauty Investment Opportunity: Ulta Beauty is expected to report earnings on June 1, and Morgan Stanley analysts believe that after a 12% year-to-date decline, the company's $434 million investment will drive future growth, setting a price target of $685, implying a 29% upside.
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See More
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