Ulta Beauty (ULTA): Valuation Insights as Target Partnership Winds Down and Global Expansion Accelerates

Ulta Beauty (ULTA) shares caught investor attention as the company announced it will end its long-running shop-in-shop partnership with Target in August 2026 and opened its first standalone store in the Middle East. These business moves could shape Ulta's growth outlook going forward.

See our latest analysis for Ulta Beauty.

Ulta Beauty's share price has gained solid momentum this year, with a 23.3% share price return year-to-date and a strong 44.96% total shareholder return over the past twelve months. Recent headlines, including the upcoming end of the Target partnership and expansion in new markets like the Middle East, have drawn attention to the stock’s long-term growth story. While there have been brief pullbacks, the market’s positive response to Ulta’s fresh initiatives suggests sentiment remains upbeat for both near-term and future performance.

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The real question for investors is whether Ulta Beauty’s remarkable run still leaves room for upside, or if upbeat headlines and robust growth have already been factored into the current share price.

Most Popular Narrative: 7.9% Undervalued

Compared to the recent closing price, the most popular narrative estimates Ulta Beauty is trading below its calculated fair value, based on future growth assumptions, brand momentum, and planned digital expansion.

Digital investments, loyalty program strength, and global expansion strategies boost customer retention, repeat purchases, and create diversified pathways for long-term profitability.

Read the complete narrative.

Curious why analysts think Ulta’s global ambitions and digital bets could drive its value even higher? One critical forecast involves sustained revenue gains and a margin trajectory not typical for specialty retailers. The key numbers behind this bullish target might surprise you. Unlock the details that set this fair value apart from the crowd.

Result: Fair Value of $574.57 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, rising costs and mounting competition, along with the looming end of key partnerships, could still weigh on Ulta’s future profit trajectory.

Find out about the key risks to this Ulta Beauty narrative.

Another View: Market Multiples Tell a Mixed Story

While the analyst consensus points to Ulta Beauty being undervalued, a look at how it is priced relative to both peers and its own fair ratio raises questions. Ulta trades at 19.8x earnings, which is cheaper than the sector average of 40.7x. However, it is more expensive than both the US Specialty Retail industry average of 17.3x and its fair ratio of 17.1x. This gap could suggest less room for further upside if the market shifts toward its fair ratio. Could this difference be a warning for valuation risk, or is Ulta’s premium justified by its execution and strong brand?

See what the numbers say about this price — find out in our valuation breakdown.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Ulta Beauty for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 894 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Ulta Beauty Narrative

If you want to dig deeper or have your own take on Ulta's story, it's quick and easy to craft your own perspective in just a few minutes. Do it your way

Prefer to form your own view? Our platform makes it easy to explore a stock's fundamentals and create your own narrative in minutes.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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