- Cleveland Research downgrades Ulta Beauty from Buy to Neutral, predicting an expected slowdown in cosmetics, increased promotions
Ulta shares dipped as low as $189.50 on Thursday morning after analysts at Cleveland Research downgraded the stock from Buy to Neutral and said Ulta stock still isn’t cheap considering the challenging environment it is facing in the retail space.
Cleveland said hurricane disruptions and negative sales and margin trends will likely weigh on Ulta earnings in the near-term.
The downgrade came just a day after CNBC's Jim Cramer said he wouldn’t sell his Ulta shares at the current price, but he also wouldn’t recommend buying more.
Ulta was once considered among the handful of U.S. retail stocks that were immune to Amazon.com, Inc. (NASDAQ: AMZN)’s dominance. Unfortunately, investors’ confidence in Ulta’s ability to dodge the Amazon bullet started dissipating back in July after reports started surfacing that Amazon is expanding its packaged beauty product offerings.
In August, BMO's Shannon Coyne and her team downgraded the stock to Hold, warning that the beauty sector is gearing up for an ugly market share war.
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