Ulta Salon Is 'In Its Own Universe'

Oppenheimer remains bullish on Ulta Salon, Cosmetics & Fragrance, Inc. (NASDAQ: ULTA) saying there is sufficient comp and earnings upside to maintain its Outperform rating.

The brokerage raised its price target on the stock by $40 to $300, implying an upside of about 15 percent from current levels.

Analyst Rupesh Parikh said the key drivers for Ulta include a "healthy US consumer backdrop, strong levels of innovation in the beauty category, potential for still solid execution on key company initiatives, store rationalization in the department store space, and benefits from store maturation."

Parikh also raised his FY16 and FY17 EPS target to $6.15 and $7.50, respectively, from $6.11 and $7.40 previously. The analyst also set a FY18 EPS forecast of $9.15. The analyst's forecast assumes ULTA is able to sustain at least a low 20's EPS growth rate.

Further, Parikh expects another strong print when the company reports its second quarter results on August 25. The analyst expects EPS of $1.39, in line with consensus.

The company is also holding an Analyst Day this fall, where the analyst anticipates management to lift both the chain's 1,200 store target and mid-teens operating margin target.

At time of writing, shares of Ulta fell 1.53 percent to $256.47.