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Why Ulta Beauty Is a Still a ‘Top Pick’ Despite CEO Transition
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Main points
- Ulta Beauty announced the retirement of CEO Dave Kimbell on Monday.
- JPMorgan analysts still call the company a “top pick,” citing improved fourth-quarter prospects.
- Analysts said Ulta’s fourth-quarter comparable sales and operating margin updates meant earnings per share (EPS) were above Wall Street consensus.
ultimate beauty (ULTA)Announce Chief Executive Officer (CEO) Dave Kimbell’s retire after the close on Monday, but JPMorgan analysts didn’t see the shift as a negative for the company.
Analysts said Monday night that the cosmetics retailer remains one of its “top picks” and reiterated its $480 share price price target. Ulta shares were little changed Tuesday afternoon at $431.43, after surging 6.7% earlier in the session.
JPMorgan Chase says prospects boost after CEO departure
Ulta on Monday also raised its fiscal fourth-quarter comparable sales and operating profit margin JPMorgan’s report said it “ensures investors clearly understand that the CEO change is not related to fourth-quarter results.” Kimbell’s successor was Chief Operating Officer (COO) Kesia Stillman.
Comparable sales rose 1% and operating margins were slightly above Ulta’s previous forecast range, meaning the quarter Earnings per share (EPS) JPMorgan said the price was $7.21, above Wall Street’s consensus estimate of $6.76.
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