Morgan Stanley Slashes Outlook for Ulta Beauty Stock

Amazon now officially owns Whole Foods

by Josh Selway

Published on Aug 28, 2017 at 9:48 AM

Analysts are weighing in on retailer Ulta Beauty Inc (NASDAQ:ULTA), entertainment stock Dave & Buster's Entertainment, Inc. (NASDAQ:PLAY), and online retail giant Amazon.com, Inc. (NASDAQ:AMZN). Here's a quick roundup of today's bearish brokerage notes on shares of ULTA, PLAY, and AMZN.

ULTA Stock Pressured Once Again

Ulta Beauty stock is falling for a second straight session, last seen 0.8% lower at $210.60, following a price-target cut to $245 from $313 at Morgan Stanley. This comes after ULTA shares hit a 52-week low of $208.25 on Friday following a disappointing earnings report. For reference, the equity topped out at $314.86 in early June. Meanwhile, analysts are mostly split on the shares. While nine brokerages rate Ulta Beauty a "strong buy," 10 others say it's just a "hold." 

Dave & Buster's Stock Tests Key Chart Level

Raymond James this morning lowered its price target on Dave & Buster's stock to $70 from $77, though this remains well above the shares' current perch of $58.09. At this level, the security continues to test its 200-day moving average, while also sitting a few points above its year-to-date breakeven level.

Options traders at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) still seem bullish. PLAY stock has a 10-day call/put volume ratio comes in at 3.25, and ranks in the 74th annual percentile. This reveals put buying has been unusually popular in recent weeks. 

Amazon-Whole Foods Deal Finalized

Amazon's purchase of Whole Foods officially closes today, and consumers are getting the first glance at the lowered grocery prices the deal will bring. SunTrust Robinson doesn't seem impressed, though, cutting its price target on AMZN to $1,190 from $1,220. Still, Amazon shares were last seen up slightly at $950, up 26% in 2017.

No matter if you're bullish or bearish, it looks like a good time to target short-term options. For instance, AMZN has a Schaeffer's Volatility Index (SVI) of 19%, which sits in the low 22nd annual percentile. This means volatility expectations for near-term contracts are pricing in unusually low volatility expectations. 


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