ULTA Salon (NASDAQ:ULTA) shares fell more than 1% pre-market today after Piper Sandler analysts reduced their price target for the stock to $505 from $595, while keeping an Overweight rating.

The analysts expressed caution about ULTA's short-term performance due to increased competition and general market normalization. However, from a stock perspective, they still consider ULTA a good buy.

The analysts noted that the anticipated share loss for ULTA is minimal due to several factors detailed in the report, and with structurally stronger margins compared to previous years, the expected EPS growth justifies a higher P/E ratio than it currently has.