Ulta Beauty (NASDAQ:ULTA) Shares Gap Down After Analyst Downgrade

Key Points

• Shares gapped down after TD Cowen trimmed its price target from $775 to $750, with the stock opening at $566.28 versus a prior close of $624.70 and trading down roughly 10.5% (last around $561).
• Ulta reported a Q4 beat—$3.90B in revenue (+11.8% YoY) and $8.01 EPS—but the stock reacted negatively because management's FY2026 guidance and rising marketing/investment costs signaled margin pressure and slower comps.
• Analyst sentiment is mixed but leans positive with a consensus rating of “Moderate Buy” and a consensus target of about $637, even as some firms raised targets (e.g., UBS, BofA) and others remain neutral.

Ulta Beauty Inc. (NASDAQ:ULTA - Get Free Report) gapped down prior to trading on Friday after TD Cowen lowered their price target on the stock from $775.00 to $750.00. The stock had previously closed at $624.70, but opened at $566.28. TD Cowen currently has a buy rating on the stock. Ulta Beauty shares last traded at $561.3270, with a volume of 660,252 shares changing hands.

ULTA has been the subject of several other reports. Bank of America upped their price objective on Ulta Beauty from $610.00 to $685.00 and gave the stock a "neutral" rating in a research report on Thursday, January 8th. UBS Group boosted their target price on Ulta Beauty from $690.00 to $780.00 and gave the stock a "buy" rating in a research note on Wednesday, January 7th. Evercore increased their target price on shares of Ulta Beauty from $640.00 to $660.00 and gave the stock an "outperform" rating in a report on Friday, December 5th. Guggenheim restated a "neutral" rating on shares of Ulta Beauty in a research note on Friday, December 5th. Finally, Argus lifted their price target on shares of Ulta Beauty from $650.00 to $700.00 and gave the company a "buy" rating in a report on Friday, January 2nd. One research analyst has rated the stock with a Strong Buy rating, fifteen have issued a Buy rating, twelve have issued a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, Ulta Beauty has an average rating of "Moderate Buy" and a consensus target price of $637.12.

Key Ulta Beauty News

Here are the key news stories impacting Ulta Beauty this week:

• Positive Sentiment: Q4 revenue and digital strength — Ulta posted $3.9B in Q4 sales (+11.8% YoY) and modest beats on revenue and EPS, driven in part by double‑digit e‑commerce growth and AI personalization efforts that boosted online demand. Press Release
• Positive Sentiment: Digital / younger customer strategy — Management emphasized investments in AI and a TikTok‑led digital push under new leadership to attract younger, affluent shoppers, a strategy that analysts say could drive longer‑term customer acquisition. Reuters: TikTok push
• Neutral Sentiment: Product/partnership catalysts — New exclusives (e.g., Rare Beauty rollout, Luna Bronze expansion) and promotional events supported traffic and higher average ticket, but these are incremental versus the margin and guidance story. Yahoo: Product launches
• Negative Sentiment: Guidance disappointed on profitability and comps — Ulta’s FY2026 guidance signaled slower comparable‑store sales and profit pressure; management flagged increased advertising and other investments that will compress margins. That guidance drove the bulk of the market reaction. Reuters: Guidance
• Negative Sentiment: Margin and cost pressure in Q4 — Operating margin and EPS declined YoY as SG&A rose (~23% YoY) from higher marketing, incentive comp and strategic spend; investors are worried about deleverage if sales slow. QuiverQuant: Margin analysis

Hedge Funds Weigh In On Ulta Beauty

Several institutional investors and hedge funds have recently added to or reduced their stakes in ULTA. Focus Partners Wealth lifted its holdings in shares of Ulta Beauty by 231.6% during the first quarter. Focus Partners Wealth now owns 3,744 shares of the specialty retailer's stock worth $1,372,000 after purchasing an additional 2,615 shares during the period. Intech Investment Management LLC raised its position in Ulta Beauty by 48.9% during the 1st quarter. Intech Investment Management LLC now owns 4,795 shares of the specialty retailer's stock worth $1,758,000 after purchasing an additional 1,574 shares during the last quarter. Sivia Capital Partners LLC bought a new position in Ulta Beauty during the 2nd quarter worth $466,000. Fox Run Management L.L.C. acquired a new position in Ulta Beauty during the 2nd quarter worth about $357,000. Finally, AE Wealth Management LLC bought a new stake in shares of Ulta Beauty in the 2nd quarter valued at about $284,000. 90.39% of the stock is currently owned by institutional investors and hedge funds.

Ulta Beauty Trading Down 10.5%

The stock has a market cap of $24.79 billion, a P/E ratio of 21.44, a price-to-earnings-growth ratio of 3.04 and a beta of 0.82. The business has a 50-day simple moving average of $667.28 and a 200 day simple moving average of $586.77.

Ulta Beauty (NASDAQ:ULTA - Get Free Report) last posted its quarterly earnings data on Thursday, March 12th. The specialty retailer reported $8.01 EPS for the quarter, topping analysts' consensus estimates of $7.93 by $0.08. The company had revenue of $3.90 billion for the quarter, compared to analyst estimates of $3.81 billion. Ulta Beauty had a return on equity of 46.33% and a net margin of 9.93%.The firm's quarterly revenue was up 11.8% on a year-over-year basis. During the same period in the previous year, the firm earned $8.46 earnings per share. Ulta Beauty has set its FY 2026 guidance at 28.050-28.550 EPS. As a group, equities analysts expect that Ulta Beauty Inc. will post 23.96 earnings per share for the current year.

About Ulta Beauty

Ulta Beauty, Inc NASDAQ: ULTA is a U.S.-based specialty retailer and beauty services provider focused on cosmetics, fragrance, skin care, hair care, bath and body, and beauty tools. The company operates a dual-format business that combines brick-and-mortar retail stores with an e-commerce platform, offering a broad assortment of national, prestige and mass-market brands alongside its own private-label products. In many locations Ulta also provides full-service salon treatments, positioning the company as a one-stop destination for product discovery and in-store services.

The retailer's product mix spans color cosmetics, haircare and styling products, skin and body care, fragrance, and accessories, catering to a wide range of consumer preferences and price points.

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