Trading Ulta Beauty Post Q4 Earnings
American beauty retail chain Ulta Beauty recorded 2022-year end earnings that exceeded $10 billion revenue for the first time in its history. While there have been concerns about a slowing economy and a more cost-conscious consumer, analysts have taken an interest in the stock.
Learn more about Ulta Beauty’s recent earnings report, what the analysts are forecasting for the stock and how to trade it below.
|Stock:||Ulta Beauty Inc|
|Symbol for Invest.MT5 Account:||ULTA|
|Date of Idea:||13 Mar 2023|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Ulta Beauty Q4 Earnings Report
Here are some of the key highlights from the latest fiscal fourth-quarter earnings report from Ulta Beauty:
- Earnings per share of $6.68 vs $5.68 expected
- Revenue of $3.23 billion vs $3.30 billion expected
- Net income up 17.8% year over year to $340.8 million
- Same store sales up 15.6% slower than the 21.4% jump last year
- 2023 full-year revenue forecast between $10.95 billion and $11.05 billion, higher than analyst estimates
- Plans to open 100 new stores over the next few years
Ulta Beauty’s last quarterly earnings reflected the holiday season where more people buy beauty products for gifts and parties. Fears of a recession, job cuts, higher inflation and a slowing economy helped affordable luxury brands like Ulta Beauty to benefit from the season.
CEO Dave Kimbell stated that skincare, makeup and fragrance lines saw double digit sales growth in the fourth-quarter. However, while same store sales grew 15.6% in the last quarter this was much lower than the 21.4% jump during the same quarter last year.
The beauty chain is looking to add more stores over the next few years which could cause lower growth in the short term but potentially help growth in the long term. However, Kimbell provided a bullish 2023 forecast for revenue and earnings.
But, most of the growth is anticipated during the first half of the year with growth levelling off in the second half. One consideration is the fallout from regulators taking control of Silicon Valley Bank last week due to mass money withdrawals.
Banking stocks provide loans for companies to grow. If the contagion causes this to dry up and the Fed continue to increase interest rates, it could have a huge impact on corporate growth. It may be prudent to keep up to date with macroeconomic events.
Ulta Beauty Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Ulta Beauty stock forecast in the past 3 months, there are currently 13 buy, 6 holds and 1 sell rating on the stock. The highest price level for a Ulta Beauty stock forecast is $650.00 with the lowest price target at $400.00.
The average price target for a Ulta Beauty stock forecast is $565.65.
An Example Trading Idea for the Ulta Beauty Stock Price
An example trading idea for the Ulta Beauty share price could be as follows:
- Buy the stock on a break above the post earnings high at $539.00.
- Target just below the highest analyst price target of $650.00.
- Keep your risk small at a maximum of 5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Ulta Beauty shares:
- If target is reached = $1,110.00 potential profit ($650.00 - $539.00 *10 shares).
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering how high the stock has already gone and the current fears of contagion from regulators taking control of Silicon Valley Bank in the US.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy and sell US stocks with a commission from $0.02 per share. This means buying 10 shares in Ulta Beauty stock would result in a commission of $0.20 ($0.02 * 10 shares) for executing a per-side transaction.
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Ulta Beauty Stock in 4 Steps
With Admirals, you can buy shares in companies like Ulta Beauty with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the Trader’s Room.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Click on the banner below to trade Ulta Beauty stock today! ▼▼▼
Do You See the Ulta Beauty Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Ulta Beauty's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
The Trade.MT5 and Trade.MT4 account allows you to speculate on the price direction of stocks and shares using CFDs.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
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