Ulta Beauty Stock Suffers Pre-Earnings Blow

Analysts may be nervous as the retailer's earnings loom

Managing Editor
Nov 29, 2019 at 9:37 AM
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Makeup retailer Ulta Beauty Inc (NASDAQ:ULTA) is trading at breakeven this morning, despite a price-target cut out of Citigroup. The analyst slashed its price target to $240 from $300, though its revised outlook still represents an upside to Wednesday night's close of $233.98. The catalyst behind the bear note is unclear, but it's just another drop in the bucket when added to the equity's rough last few months on the charts. 

As mentioned above, Ulta Beauty stock has struggled to gain positive momentum in 2019. Specifically, after its drastic Aug. 30 post-earnings bear gap, the security sliced through its 200-day moving average and into annual low territory. In its current state, ULTA remains 21% lower year-over-year, and trapped below the $250 level's ceiling of resistance. Looking ahead, the beauty name is scheduled to report third-quarter results after the close, Thursday, Dec. 5.

In light of recent negative price action, it won't come as much surprise to hear near-term open interest looks unusually put-heavy on Ulta Beauty stock. This is according to the Schaeffer's put/call open interest ratio (SOIR) of 1.27, which ranks just 5 percentage points from an annual high.

Meanwhile, short interest on ULTA dropped 12.9% during the past two reporting periods. This accounts for 5.4% of the equity's total available float, or 1.7 times the average daily trading volume. 

 

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