Should you buy Ulta stock given Amazon threat? This Wall Street analyst answers

March 18, 2025 12:35 AM AEDT | By Investing

Google News:

Should you buy Ulta stock given Amazon threat? This Wall Street analyst answers

Recent News

What are next big copper projects? UBS tells when equipment makers cou...

EUR/USD poised to rack up more gains as ECB and Fed rate paths set to...

Carney launches ‘One Canadian Economy’ Act to unify trade, approvals

Trump signs orders to enhance drone defenses, support supersonic trave...

Investing.com -- Loop Capital reiterated its Buy rating on Ulta Beauty (NASDAQ:ULTA) shares, arguing that the “Amazon threat” surrounding the stock appears to have been “overblown.”

The firm's updated pricing study on Estée Lauder products sold by Amazon (NASDAQ:AMZN) showed that concerns about Ulta Beauty facing an existential threat from Amazon were exaggerated.

The study compared prices of 50 exact "like-for-like" items across makeup, skincare, and haircare categories, finding that Amazon's prices were on average only 0.2% less expensive than Ulta's, a decrease from the 1.7% difference observed in October.

Amazon continues to respect list prices for Estée Lauder items, aligning closely with Ulta Beauty's pricing, according to Loop Capital’s analysis.

In the updated study, Amazon offered a lower price on only 4% of the items, the same price on 96%, and higher prices on none, demonstrating a marginal price difference between the two retailers. The total basket price on Amazon was $3, or 0.1% less expensive than Ulta Beauty's, compared to a $29, or 1.7% difference in October.

“Given a level pricing playing field, we believe Ulta Beauty has significant advantages over Amazon, including the ability to pick up and return online orders in store and accumulate loyalty program points,” said Anthony Chukumba, a managing director at Loop Capital.

With nearly 45 million loyalty program members, these features contribute to Ulta's strong position in the beauty retail market. Additionally, Ulta Beauty offers free gifts with purchase on select products, an incentive not matched by Amazon.

“While we plan to continue to periodically compare Ulta Beauty and Amazon's prices, we now think prior investor concerns about Ulta Beauty facing an "existential Amazon threat" were clearly overblown,” Chukumba said.

Therefore, Loop Capital reiterated a Buy rating and its $480 price target on Amazon stock.

This article first appeared in Investing.com

Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Pty Ltd (“Kalkine Media, we or us”), ACN 629 651 672 and is available for personal and non-commercial use only. The principal purpose of the Content is to educate and inform. The Content does not contain or imply any recommendation or opinion intended to influence your financial decisions and must not be relied upon by you as such. Some of the Content on this website may be sponsored/non-sponsored, as applicable, but is NOT a solicitation or recommendation to buy, sell or hold the stocks of the company(s) or engage in any investment activity under discussion. Kalkine Media is neither licensed nor qualified to provide investment advice through this platform. Users should make their own enquiries about any investments and Kalkine Media strongly suggests the users to seek advice from a financial adviser, stockbroker or other professional (including taxation and legal advice), as necessary.
The content published on Kalkine Media also includes feeds sourced from third-party providers. Kalkine does not assert any ownership rights over the content provided by these third-party sources. The inclusion of such feeds on the Website is for informational purposes only. Kalkine does not guarantee the accuracy, completeness, or reliability of the content obtained from third-party feeds. Furthermore, Kalkine Media shall not be held liable for any errors, omissions, or inaccuracies in the content obtained from third-party feeds, nor for any damages or losses arising from the use of such content.
Kalkine Media hereby disclaims any and all the liabilities to any user for any direct, indirect, implied, punitive, special, incidental or other consequential damages arising from any use of the Content on this website, which is provided without warranties. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music that may be used on this website are copyrighted to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music used on this website unless stated otherwise. The images/music that may be used on this website are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have made reasonable efforts to accredit the source wherever it was indicated as or found to be necessary.
This disclaimer is subject to change without notice. Users are advised to review this disclaimer periodically for any updates or modifications.