Ulta Beauty Trades at 23x Earnings After 27% Rally, Cramer Says
Jim Cramer identified Ulta Beauty as a 'bargain offering', citing CEO Kecia Steelman's turnaround that drove a 27% rally over 2.5 months. He noted the stock trades at just over 23 times forward earnings and foresees further upside if crude oil stays below $120 and market pullbacks allow accumulation.
1. Cramer Highlights Bargain Thesis
Jim Cramer named Ulta Beauty one of three consumer stocks he recommends buying before earnings, calling it a “bargain offering” poised for further gains if oil prices remain controlled.
2. CEO Steelman’s Turnaround Spurs Rally
Since Kecia Steelman became CEO just over a year ago, Ulta has rallied 27% in 2.5 months, achieving frequent new highs driven by expanded in-store services and a refined product mix.
3. Current Valuation Reflects Premium
The stock now trades at just over 23 times next year’s earnings estimates, marking a shift from a slight market discount in October to a modest premium today.
4. Oil Price Threshold and Buy Strategy
Cramer expects additional upside if crude oil stays below $120 and suggests that any market-wide pullback would offer investors an attractive chance to add to Ulta positions.