Evercore ISI on ULTA Salon (ULTA) Knock-On Impact: 'we see a buying opportunity for COTY'

Evercore ISI analyst Michael Binetti reiterated an Outperform rating and $630.00 price target on ULTA Salon (NASDAQ: ULTA).

The analyst comments "Beauty stocks are trading off following Ulta’s statement about a slowdown in the U.S. market, across price points and segments, that’s “earlier and a bit bigger than thought.” Retail sales for U.S. Mass Beauty has slowed to 3-4% through March 24, v. the 7% this past 4Q (page 3). This read includes Ulta and Amazon but captures mass brands only ─ those that also distribute through Walmart, Target and drugstores ─ and therefore excludes so-called “prestige” brands. This analysis captures actual retail sales in Amazon ─ not projections from scrapping the website ─ but is limited to 1st -party sales. By excluding Amazon marketplace and/ or distributor sales, we think this series should more closely align with sell-in or reported sales. As shown on page 8, this universe captures an additional 30% of the mass beauty market in the U.S. v. prior “scannertracked” channels. Given today’s trading, we see a buying opportunity for COTY – retailers’ reorders of fragrances are solid, albeit subject to the law of bigger numbers, as per our recent meeting with CEO and CFO─ and for EL, 1) the launch of Clinique on Amazon last week is a strategic positive as we argued months ago; 2) China online data is encouraging"

For an analyst ratings summary and ratings history on ULTA Salon click here. For more ratings news on ULTA Salon click here.

Shares of ULTA Salon closed at $519.68 yesterday.

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