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Morgan Stanley Increases PT on Ulta Beauty (ULTA), Maintains Overweight Rating

On May 30, Morgan Stanley increased the price target on Ulta Beauty, Inc. (NASDAQ:ULTA) from $460 to $550 and maintained its Overweight rating on the stock.

Simeon Gutman from Morgan Stanley made this upgrade as he sees room for multiple expansions and upside for ULTA ahead. Gutman’s bull and bear case scenarios for Ulta Beauty are pegged at almost 45% and 25%, respectively. The analyst sees an upside if the comparable store sales (comps) continue to experience 2%+ growth.

A woman applying makeup in her bathroom, showcasing the variety of beauty products available.

The company reported a 2.9% growth in comps during Q1 2025, exceeding Wall Street’s estimates of 0.4% and the market forecast of 1%. The increase during Q1 was driven by the success of Ulta Beauty’s Unleashed strategy. The strategy included improved execution, new brand launches, marketing initiatives, and updated promotional efforts, which pushed the sales for the company.

After posting 4.5% year-over-year growth in net sales to $2.8 billion during Q1, Ulta Beauty has updated its FY2025 guidance. The company expects net sales in the range of $11.5-$11.7 billion, and the EPS is anticipated between $22.65-$23.20. While the consumer environment remains dynamic, Gutman believes there is further upside from here if Ulta Beauty continues to sustain its current comps momentum.

Ulta Beauty, Inc. (NASDAQ:ULTA) operates as a speciality beauty retailer in the U.S. The company offers branded and private-label beauty products from a wide range of cosmetic products to skincare and salon styling tools, among others.

While we acknowledge the potential of ULTA to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ULTA and that has 100x upside potential, check out our report about this cheapest AI stock.

Read Next: 30 Best Stocks to Buy Now According to Billionaires and 15 Small-Cap Healthcare Stocks Hedge Funds Are Buying.

Disclosure: None.

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