According to the Associated Press, shares of Ulta Salon Cosmetics & Fragrance Inc. climbed Tuesday morning after an analyst tagged the beauty store and salon chain with an "outperform" rating, saying the stock is poised to gain 33% over the year.
The company's stock gained $1.11, or 8.2%, to reach $14.63. Since going public in October, the Illinois-based company’s stock has ranged from $10.08 to $35.63.
Robert W. Baird & Co. analyst J. David Cumberland said Ulta merited the rating because its wide brand selection, large stores and an aggressive growth plan placed it ahead of its competitors. Further, he noted the company plans to expand its store square footage by 20% to 25% over the next five years and add 1,000 new stores over the next 10 years.
"Ulta combines the value and convenience of a beauty superstore with the premium products and services of a specialty retailer. We believe Ulta's business model is based on significant competitive advantages," said Cumberland in his report, setting Ulta's price target at $18.00, 33% higher than the stock's closing price Monday of $13.52.