NEW YORK (TheStreet) -- Shares of Ulta Salon, Cosmetics & Fragrance (ULTA) were down 5.05% to $257.56 in late-morning trading on Friday despite the Bolingbrook, IL-based beauty retailer reporting higher-than-expected 2016 second quarter results.
After yesterday's closing bell, Ulta posted earnings of $1.43 per share on revenues of $1.07 billion. Analysts were looking for earnings of $1.39 per share and $1.06 billion in revenue.
As a result, Deutsche Bank hiked its price target to $280 from $225 on the stock, saying the company posted a "terrific" quarter and highlighted its better-than-expected comparable store-sales of 14.4%, compared to consensus estimates of 12.7%.
However, the firm noted that expectations were "so high" for the retailer that in-line to slightly better results probably won't be a major catalyst for the stock.
That said, Ulta continues to be propelled forward by its successful loyalty card program and steady introduction of new products and brands in its stores, the firm added.
Deutsche Bank also raised its 2016 and 2017 earnings estimates to $6.23 per share and $7.86 per share, respectively, compared to its prior outlook of $6.18 per share and $7.59 per share.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate ULTA SALON COSMETCS & FRAG as a Buy with a ratings score of A-. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, compelling growth in net income, good cash flow from operations and expanding profit margins. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.
You can view the full analysis from the report here: