Ulta Beauty (NASDAQ:ULTA) shares edged higher on Tuesday after Canaccord Genuity started bullish coverage of the cosmetics and beauty products retailer.

Equity analyst Susan Anderson applauded the company’s robust sales growth in recent years and advised that this outperformance should only continue. In fact, the beauty category is a key sector to consider amid a weaker macro backdrop given historical resilience, she told clients. Within the category itself, Ulta is expected to continue eating up market share. 

“We see Ulta as continuing to be in growth mode as management looks to open additional doors across the US, expands in Targets, and increases its penetration of prestige and luxury products,” she wrote. “With only 1,355 total doors, management still believes they can reach 1,500-1,700 doors long term with the potential for additional doors if smaller formats currently being tested are successful…Additionally, consumer spending on beauty and health & wellness has continued to be strong with increasing demand, and Ulta offers price points across the entire spectrum, which should buffer against trade down.”

Anderson started coverage with a Buy rating and a $662 price target. Shares of Ulta Beauty (ULTA) rose 0.4% in Tuesday’s premarket trading. The stock has surged nearly 30% in the past 6 months.

Read more on the company’s recent earnings results.

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