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Barclays sees a rosy outlook ahead for shares of Ulta Beauty . The bank upgraded the beauty retailer to an overweight weighting from equal weight. Analyst Adrienne Yih accompanied the move by lifting her price target to $589 from $518. Shares of Ulta have surged 20% this year. Yih’s revised forecast calls for additional upside of 13% from the stock’s Thursday close. ULTA YTD mountain ULTA YTD chart “We believe shares can continue to be propelled higher by upwards consensus earnings revisions over the next several quarters,” the analyst wrote. As a catalyst, Yih cited recent business decisions made by Ulta CEO Kecia Steelman, who took over the reins of the company earlier this year. “We are highly encouraged by a series of rapid and decisive changes since CEO Kecia Steelman took the helm in January 2025,” Yih said. Specifically, tailwinds include a return to margin expansion, improvements in promotional activity, the company’s focus on optimizing points of retail distribution and its initially conservative guidance for the fiscal year 2025. Yih also emphasized that as one of only two specialty multi-brand domestic beauty retailers, alongside Sephora, Ulta commands a unique target audience. “Furthermore, we believe that the overall beauty landscape, which has been normalizing since its peak in 2022, is in the process of stabilizing with an annual growth rate in the mid-single-digit range,” Yih added. “While we acknowledge price increases in discretionary goods are on the horizon, and consumer demand in the U.S. market remains an unknown variable, we believe that beauty, and in particular ULTA’s core customer (aka the “beauty enthusiast”), will continue to over-index wallet share toward beauty, health, and wellness categories.” The analyst also pointed to Ulta’s relative resistance to tariffs as another tailwind. Specifically, only around 1% of its merchandise was directly imported in fiscal year 2024, “suggesting minimal direct-cost tariff risk.” “The company has previously disclosed that it relies on China imports only for select hair care tools, store fixtures, and store supplies,” she added. “As such, overall risk remains negligible and well below the rest of our coverage universe as the company’s key categories, such as beauty and personal care products have limited China and Southeast Asia exposure (i.e., K-beauty and J-beauty); we do note that some product is imported from Europe.”
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