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Update: BofA Securities Upgrades Ulta Beauty to Buy From Neutral, $685 Price Target

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(Updated to include BofA's commentary)

BofA Securities upgraded Ulta Beauty (ULTA) to buy from neutral, expecting consistent sales growth and better flowthrough.

The company's 26% shares pullback off its 52-week high has brought elevated investor expectations down to earth, analyst Lorraine Hutchinson wrote in a Tuesday note.

The firm has a differentiated model, developed around breadth of assortment, large store base, and over 46 million loyalty members who make up roughly 95% of sales, Hutchinson said.

"A more competitive market raises the execution bar, but it also gives customers more points of cmparison across channels," the analyst mentioned.

Ulta Beauty has an average rating of overweight and mean price target of $695.71, according to analysts polled by FactSet.

Price: $531.03, Change: $+13.03, Percent Change: +2.52%

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