Ulta Beauty Stock Slips on Guggenheim Downgrade

The security still sports an over 97% year-over-year lead, though

Digital Content Manager
Mar 16, 2021 at 10:08 AM
facebook twitter linkedin

The shares of Ulta Beauty Inc (NASDAQ:ULTA) are down 1.2% at $318.76 at last check, after a downgrade from Guggenheim to "neutral" from "buy." The analyst in question noted the company's profit margins are uncertain, as competition on digital platforms ramps up. The downgrade is a break from the slew of bull notes the beauty retailer received after reporting better-than-expected fourth-quarter earnings and revenue last week.

Ulta Beauty stock is taking a step back from a March 11, two-year high of $351, which it hit one day before its corporate report. Despite today's breather, the shares have support in place at their 40-day moving average, a trendline that's only been breached once on a closing basis since November. Year-over-year, though, ULTA still sports a 97.2% lead.

The brokerage bunch was fiercely optimistic towards the equity coming into today, with 13 of the 19 in coverage carrying a "strong buy" rating, while the remaining six called it a tepid "hold." Plus, the 12-month consensus target price of $335.57 is a 4.9% premium to current levels. 

The options pits reflect that optimism, with calls popular. This is per the security's Schaeffer's put/call open interest ratio (SOIR), which sits in the 12th percentile of its annual range, meaning short-term option traders have rarely been more call-biased. 

Now seems like a good opportunity to weigh in on ULTA's next move with options. The equity's Schaeffer's Volatility Index (SVI) of 38% stands higher than only 4% of all other readings from the past year. This indicates options players are currently pricing in lower-than-usual volatility expectations.


If you are not making money with options, you aren’t buying options like this…

There is no options strategy that more perfectly approaches trading the fastest moving and most volatile stocks available in the marketplace than this one. In fact, there is no strategy that better utilizes put options for optimal returns and a real trading edge over other traders in the exact same market. New options traders fail out at an incredible rate without proper trade research, execution timing, and option picking. Capitalize on Schaeffer’s 100+ years of options trading excellence with the most coveted product launch in company history. Don't waste another second... join us right now before the next round of trades are released!

Schaeffer's Investment Research Master Portfolio Trial


Special Offers from Schaeffer's Trading Partners