Ulta Stock ‘Unleashed’ Gains in 2025. Should You Keep Buying Shares in 2026?

Core Insights - The beauty segment within consumer discretionary is a key area to monitor as consumer spending on beauty products can indicate market trends [1] - Ulta is implementing the "Ulta Beauty Unleashed" initiative aimed at enhancing in-store experiences and expanding into higher-growth markets [2] Company Strategy - Ulta's management is focused on improving operations and market expansion, which is positively received by investors [4] - The stock is trading near its all-time high, reflecting favorable market positioning and fundamentals [4] Financial Outlook - If Ulta successfully executes its growth strategy, the current stock multiple may appear undervalued in retrospect [5] - The company has a free cash flow yield of approximately 5% and a strong balance sheet, supporting capital expansion plans [5] Analyst Perspectives - Analysts from Morgan Stanley have revised their models to account for higher margins due to Ulta's strategic reset [6] - The consensus price target for ULTA stock is $634.28, suggesting an upside of about 4% from current levels [6]