Please ensure Javascript is enabled for purposes of website accessibility

Is Ulta Beauty Stock Headed Back Down to $230?

By Demitri Kalogeropoulos – Updated Jun 1, 2020 at 10:06AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

One analyst just got a bit more optimistic about the stock despite a tough earnings report in late May.

Ulta Beauty (ULTA -1.74%) has attracted another conflicted Wall Street pro. An analyst at Loop Capital this week boosted his price target on the retailer's stock while keeping his rating at a hold and predicting declines in the share price over the short term.

Analyst Anthony Chukumba moved his price prediction up to $230 per share from $210 but remains bearish following the spa and beauty giant's weak first-quarter earnings report.

A woman applies skin cream in a mirror.

Image source: Getty Images.

Ulta Beauty announced in late May that sales dove by over 33% due to COVID-19 related store closures in the first quarter. That slump generated an $80 million first-quarter loss despite the chain's booming digital business.

Ulta's short-term trends are unusually hard to predict while the pandemic threat remains. It is the industry leader in a wide range of essential products like skin and hair care. However, its interactive and personal shopping experience is a key draw for consumers, and that asset is threatened by social distancing requirements that are likely to last well into 2020.

Combine that challenge with the potential for tough conditions in the core makeup industry, and its not hard to see a scenario where Ulta's stock declines over the next few months. Investors' long-term returns, meanwhile, will depend on how well CEO Mary Dillon and her team can adjust the business to new consumer behavior by leaning on strengths like their e-commerce platform and industry-leading loyalty program.

Demitrios Kalogeropoulos has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Ulta Beauty. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Ulta Beauty Stock Quote
Ulta Beauty
$385.25 (-1.74%) $-6.83

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.