Short Ulta
已更新
Technical: Series of impulsive rejections off $314.50 level. MACD rolling over w RSI bearish divergence on the daily chart. Risk/reward favors downside over upside. Implied vol skew on options contracts currently @ 4.5 delta put/call spread (very bearish).
Fundamental: Cosmetics retail is a highly cyclical industry. Historically, Q4 numbers come in hot on a comparative trending basis against prior quarters in a given calendar year. As a result, a sequential rate of change is a better comp stack.
Let's take a look at their historical EPS (calendarized):
EPS
Q4 2013: $1.10
Q4 2014: $1.36
Q4 2015: $1.68
Q4 2016: $2.24
Q4 2017: $3.38
Q4 2018: $3.55* (expected)
YoY Quarterly EPS Rate of Change
Q4 2014: 23.64%
Q4 2015: 25.53%
Q4 2016: 33.33%
Q4 2017: 50.89%
Q4 2018: 5.02%
The deceleration in EPS is evident, as the macro economic acceleration coming out of 2015/2016 is becoming increasingly difficult to comp, moving into the back half of 2019. In addition, retail sales as a whole were weak in Q4 2018 and Q1 2019 on a sequential and trending rate of change, and I expect that the overall macro economic headwind will matriculate into the earnings report issued on Thursday evening. Looking ahead, as the US economy enters stagflation, I believe margin compression from higher input costs, firm wages, and decelerating productivity will weigh in on Ulta's forward guidance and EPS targets. I am short the stock with target exit of $252 per share.
Fundamental: Cosmetics retail is a highly cyclical industry. Historically, Q4 numbers come in hot on a comparative trending basis against prior quarters in a given calendar year. As a result, a sequential rate of change is a better comp stack.
Let's take a look at their historical EPS (calendarized):
EPS
Q4 2013: $1.10
Q4 2014: $1.36
Q4 2015: $1.68
Q4 2016: $2.24
Q4 2017: $3.38
Q4 2018: $3.55* (expected)
YoY Quarterly EPS Rate of Change
Q4 2014: 23.64%
Q4 2015: 25.53%
Q4 2016: 33.33%
Q4 2017: 50.89%
Q4 2018: 5.02%
The deceleration in EPS is evident, as the macro economic acceleration coming out of 2015/2016 is becoming increasingly difficult to comp, moving into the back half of 2019. In addition, retail sales as a whole were weak in Q4 2018 and Q1 2019 on a sequential and trending rate of change, and I expect that the overall macro economic headwind will matriculate into the earnings report issued on Thursday evening. Looking ahead, as the US economy enters stagflation, I believe margin compression from higher input costs, firm wages, and decelerating productivity will weigh in on Ulta's forward guidance and EPS targets. I am short the stock with target exit of $252 per share.
注释
Wrekd
免责声明
这些信息和出版物并不意味着也不构成TradingView提供或认可的金融、投资、交易或其它类型的建议或背书。请在使用条款阅读更多信息。