Morgan Stanley has updated its rating for Ulta Beauty (NASDAQ:ULTA) to "Overweight" with a raised price target from $600 to $640.Ulta's fiscal third-quarter net sales rose by 12.9% to $2.9 billion, surpassing estimates and driving a stock increase of 12.65% this holiday season.The company has raised its fiscal 2025 outlook, projecting net sales of approximately $12.3 billion, with a current market capitalization of approximately $26.97 billion.Ulta Beauty (NASDAQ:ULTA) is a leading beauty retailer in the Un ...

Company Performance - The company reported a retail value growth of 18% year-on-year for 2QFY26, with retail values in mainland China, Hong Kong, Macau, and overseas increasing by 20% and 13% respectively [1] - Same-store sales in mainland China for self-operated and brand stores grew by 3% and 27%, while same-store sales in Hong Kong, Macau, and overseas markets increased by 11% [1] Retail Growth Acceleration - Retail growth in 2QFY26 accelerated compared to previous quarters, with group retail value and same-store sales increasing by 18% and 10% year-on-year respectively [1] - The growth in mainland China was primarily driven by priced gold products, which accounted for 15% of retail during the quarter [1] Gold Product Performance - Priced gold products continued to perform strongly, with same-store sales in mainland China for self-operated and brand stores growing by 3% and 28% respectively [2] - The same-store sales for priced gold products in Hong Kong, Macau, and overseas markets turned positive, increasing by 6% [2] October Sales Trends - Sales momentum continued positively in October, with same-store sales in mainland China and Hong Kong, Macau, and overseas regions growing by 16%/51% and 19% respectively during the period from October 1 to 14 [2] Earnings Forecast and Valuation - The company maintains its EPS forecasts for FY26 and FY27 at 2.55 and 2.99 HKD, with the current stock price corresponding to 10/9 times FY26/27 earnings [2] - The target price has been raised by 26% to 30.55 HKD, reflecting an 18% upside potential from the current stock price [2]

Core Insights - Chow Tai Fook (01929) reported a 4.1% year-on-year increase in retail value for the second quarter ending September 30, 2025, with mainland China retail value growing by 3% and retail value in Hong Kong, Macau, and other markets increasing by 11.4% [1] Group 1: Retail Performance - Same-store sales in mainland China turned positive with a growth of 7.6% for direct stores and 8.6% for franchise stores during the quarter [1] - Excluding the watch business, same-store sales for direct stores in mainland China grew by 9.9% [1] - Same-store sales in Hong Kong and Macau increased by 6.2%, with Hong Kong rising by 3.2% and Macau by 17.3% [1] Group 2: Product Pricing - The average selling price of gold jewelry and products remained strong, with mainland China's average price rising to HKD 7,900 (from HKD 6,400 in Q2 FY2025) and Hong Kong and Macau's average price increasing to HKD 11,700 (from HKD 9,400 in Q2 FY2025) [1] - The average selling price of jewelry embedded products in mainland China rose to HKD 11,000 (from HKD 9,200 in Q2 FY2025), while in Hong Kong and Macau, it was HKD 15,000 (from HKD 15,300 in Q2 FY2025) [2]