Ulta Beauty poised to sustain growth while controlling costs, says UBS with shares likely to rise.

UBS analysts highlight that Ulta Beauty is well-positioned to maintain its recent growth momentum while tightening control over operating costs, particularly SG&A expenses which have grown faster than sales. The company’s expansion and strategic investments, including the acquisition of Space NK, have driven cost increases, but UBS expects spending to moderate in 2026 with improved cost management and marketing discipline. Despite concerns about slowing customer traffic, UBS sees an opportunity as the market underestimates Ulta’s potential to expand margins, maintaining a Buy rating with a $810 price target based on 2027 earnings estimates.