In a world where every dollar counts, a beauty brand is quietly beating the odds—and Wall Street is taking notice. Ulta Beauty (NASDAQ:ULTA), often seen as just another retail stock, is defying expectations with bold strategy, powerful growth, and analyst praise that could turn struggling portfolios—and moods—around. For anyone feeling left behind by the job market or financial stress, Ulta’s unlikely stock surge isn’t just market news—it’s a rare story of resilience, reinvention, and reward in a chaotic economic landscape.
On Friday, Morgan Stanley (NYSE:MS) lifted its price target for Ulta Beauty stock to $550, up from $460, maintaining its Overweight rating. This upgrade represents a roughly 20% upside from the current post-market price of $421.79, fueled by a positive risk/reward outlook. Analysts estimate a potential upside of 45% and downside of 25%, citing Ulta’s strong first-quarter earnings and continued momentum in sales and market share. This comes as a welcome surprise for investors in a climate where retail often struggles to impress.
Ulta’s Q1 2025 results were a standout: earnings per share hit $6.70, crushing the $5.75 forecast. Revenue reached $2.85 billion, well above the expected $2.79 billion. These figures weren’t just a beat—they were a signal. The company’s “Unleashed” strategy, focused on improved execution, brand refreshes, and sharp marketing, is driving real results. Comparable store sales climbed 2.9%, surpassing Wall Street’s meager 0.4% expectation. This kind of performance is rare, especially in a volatile consumer environment.
Ulta’s financial health adds another layer of confidence. InvestingPro’s data gives the company a “GREAT” score, with a 42.78% gross margin and a 50% return on equity—impressive numbers in any sector. Analysts from eight firms recently revised earnings estimates upward. Morgan Stanley calls Ulta’s valuation—at 18x forward earnings—“reasonable,” especially since it sits 22% below its long-term average. That gap suggests investors are getting growth at a discount, a compelling proposition in today’s market.
Multiple analysts have followed Morgan Stanley’s lead. Telsey Advisory Group raised its target to $520, Canaccord Genuity to $542, and Goldman Sachs to $473, citing solid revenue and margin performance. Even neutral-rated firms like Piper Sandler adjusted targets upward. Analysts note Ulta’s ability to grow both mass and prestige segments, giving it a broader competitive edge. The result? A stock up 9.3% in a single day—and likely not done yet.
With second-half comp sales expected to hover from flat to modestly positive, Ulta faces some headwinds. But the consensus is clear: if current strategies hold, there’s room for further upside. The beauty retailer is capitalizing on consumer demand for self-care and affordable luxury, trends that tend to remain strong even in tough times. For a business showing mid-teens EBIT margin potential, this isn’t just a recovery—it’s a reawakening.
Key Analyst Targets & Data Summary
| Analyst Firm | New Price Target | Rating | Reason for Upgrade |
| Morgan Stanley | $550 | Overweight | Strong Q1, attractive risk/reward |
| Canaccord Genuity | $542 | Buy | 4.5% YoY sales growth, EPS beat |
| Telsey Advisory Group | $520 | Outperform | Revenue, margin strength |
| Goldman Sachs | $473 | Neutral | Market share gains |
| Evercore ISI | $490 | Buy | Comps beat expectations |
| Piper Sandler | $437 | Neutral | Cautious on H2 growth |
Why did Morgan Stanley raise its price target for Ulta Beauty stock?
Morgan Stanley increased its price target for ULTA from $460 to $550 due to strong Q1 2025 performance, better-than-expected comparable sales, and what it considers an attractive risk/reward setup—with potential upside of 45% and downside of 25%.
What is Ulta Beauty’s current stock price compared to the new target?
As of the latest update, Ulta’s post-market stock price is $421.79. The new Morgan Stanley price target of $550 represents roughly a 20% potential upside.
How did Ulta perform in Q1 2025 compared to expectations?
Ulta reported an earnings per share (EPS) of $6.70, significantly above the expected $5.75. Revenue reached $2.85 billion, beating forecasts of $2.79 billion. Comparable store sales rose 2.9%, well above the anticipated 0.4%.
What is the current valuation of Ulta stock?
Ulta is trading at around 18x forward year two (FY2) earnings per share, which is about 22% below its long-term average P/E ratio—considered a potentially favorable entry point for investors.
What is Ulta’s projected EPS for fiscal year 2025?
Ulta Beauty’s updated EPS guidance for FY2025 ranges from $22.65 to $23.20, reflecting optimism in continued performance despite economic challenges.
What are Ulta’s key financial strengths?
According to InvestingPro, Ulta has a “GREAT” financial health score, with a 42.78% gross margin and 50% return on equity—indicating robust profitability and operational efficiency.
What are the expectations for Ulta’s sales going forward?
Ulta projects FY2025 net sales between $11.5 billion and $11.7 billion, with comparable sales growth ranging from flat to 1.5% in the second half of the year.
Real, Practical Tips for the Unemployed:
- Stay informed on market movers. Even if you’re not investing now, following stories like Ulta’s teaches valuable lessons about timing, resilience, and strategy—key traits in job hunting, too.
- Use time to upskill. Just as Ulta rebranded and restructured, consider how you can refresh your own “personal brand”—with free online courses, certifications, or creative projects.
- Find motivation in success stories. If a beauty stock can overcome economic headwinds with smart moves, so can you. Reinvention isn’t a luxury; it’s a necessity—and it starts with belief.
- Set small, measurable goals. Whether it’s applying to five jobs a week or learning one new skill per month, momentum builds confidence.
- Don’t discount progress. Like Ulta’s modest 2.9% comps growth beating expectations, small wins often signal bigger breakthroughs ahead.
