Citi analyst Kelly Crago says Ulta Beauty reported better than expected Q3 results due to stronger gross margin. And while management lowered Q4 guidance, the outlook is still much better than feared, Crago tells investors in a research note. She raised her price target for the shares to $242 from $240 and keeps a Neutral rating on the name. Not much has changed since last quarter, as prestige cosmetics continues to be pressured and management expects it to remain challenged in 2020, contends the analyst. Until visibility into an inflection in prestige cosmetics, she expects the shares to be range-bound.

Wells Fargo lowered the firm's price target on Ulta Beauty to $350 from $450 and keeps an Underweight rating on the shares. The category is slowing faster than anticipated as the competitive backdrop has become more challenging, the firm says. Margins will likely continue to erode as the need to invest accelerates, Wells adds.