Investing.com -- Morgan Stanley upgraded Ulta Beauty (NASDAQ:ULTA) to "Overweight" and raised its price target to $500 from $430, on stronger prospects for the beauty retailer in 2025.
Analysts see upside driven by industry growth, improved market share, and reasonable sales and margin expectations.
The firm forecasts 2025 beauty spending to grow 3.5%, outpacing pre-COVID levels. Ulta's loyalty program, with 44 million members, and strategic initiatives are expected to support sustained growth.
Morgan Stanley (NYSE:MS) projects 2026 earnings per share of $26.90 and believes Ulta's valuation, currently at ~17x forward P/E, offers room for upside. The risk/reward scenario includes a $600 bull case and $325 bear case.