ULTA has continued it’s laggard performance. Although I really want to like this stock for the diversity it adds to our portfolio, I’m less than impressed with the trend it’s had. It has gotten downgraded multiple times by a few analysts over the past few weeks, Oppenheimer specifically downgraded from Outperform to Perform after pointing out softer trends in the beauty market, and since ULTA has risen 200% in about three years, it’s hard pressed to keep up that trend.
With bearish news from analysts and lack luster performance, I’m hard pressed not to sell. The only thing holding me back is that in 2 weeks, ULTA will be releasing it’s next quarter earnings which might change the direction of the stock over the following quarter.
I’m going to propose we either sell now, and put the money to use in another stock that has some higher valuation, or we hold for one month and re-evaluate at that time.