Ulta Beauty Announces $2 Billion Share Buyback Program

ULTA's typically quiet options pits are bursting with activity today

Digital Content Manager
Mar 11, 2022 at 10:14 AM
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Ulta Beauty Inc (NASDAQ:ULTA) entered the earnings confessional after yesterday's close to report fourth-quarter earnings of $5.41 per share -- much higher than analysts estimates of $4.58 per share -- as well as a revenue win. The beauty retailer also beat comparable-store sales expectations, and announced a $2 billion share buyback plan. At last check, ULTA is up 1.1% to trade at $384.88.

The update is garnering mixed reviews from the brokerage bunch. No fewer than three analysts have raised their price targets, with J.P Morgan Securities hiking its objective to $470 from $460, while two chimed in with price-target cuts. Generally, analysts are optimistic on ULTA, with 16 of the 25 in coverage rating it a "buy" or better", while the 12-month consensus target price of $442.91 is an 18.1% premium to current levels.

Ulta Beauty stock looks like it could benefit from a sentiment shift in the options pits. Over at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), the equity's 50-day put/call volume ratio of 1.17 sits higher than all but 4% of readings from the past year. This means longs puts have been getting picked up at much faster-than-usual clip.

The security's usually quiet options pits are bursting with activity today. So far, 2,595 puts and 2,544 calls have crossed the tape, which is 12 times what is usually seen at this point. Most popular is the 3/11 400-strike call, followed by the 370-strike put in the same series, with positions being opened at the latter.

The equity has been struggling with a ceiling at the $385 mark since January, though it surged above that level and toppled overhead pressure from the 80-day moving average earlier today. The shares are still a ways off from their Jan. 4 record high of $422.43, but are on track for their fourth-straight daily win. Year-to-date, the security is down 6.7%. 

 

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