If there was one consumer-focused growth company that had been immune to many ongoing market concerns, Ulta Beauty Inc. (NASDAQ: ULTA) would have fit the bill. In early 2014 this stock was under $100 a share, but it rose to just over $300 by May of 2017. Its shares have been selling off since then, and one analyst report now calls for even more caution to temper the bulls for endless growth expectations.

Oppenheimer issued an analyst downgrade on Ulta on Monday, cutting the shares to Perform from Outperform. Oppenheimer’s Rupesh Parikh and Erica Eiler have a $270 target, which is less than 10% upside from the prior $248.60 closing price. This represents just 8.6% upside from Friday’s closing price and is after a significant sell-off in the past 90 days. Most analysts have 8% to 15% upside in Dow and S&P 500 stocks for new Buy and Outperform ratings, but Ulta’s valuation of 30 times expected 2017 earnings is much higher than a traditional consumer focused stock in the Dow or in the S&P 500.

At issue now is that this is not just a valuation call. Oppenheimer sees a more balanced risk/reward scenario. Again, Ulta shares had risen more than 200% in about three years, and 30 times expected earnings isn’t cheap. Oppenheimer has now become concerned about softer trends in the U.S. beauty market. These are not issues that investors want to hear in high-beta stocks.

The Oppenheimer report said:

We are downgrading shares of Ulta to Perform from Outperform. Following a significant sell-off, Ulta shares are now down 2% year to date versus a 10% gain in the S&P 500. We initially attributed much of the weakness to beauty discounting concerns and more recently Amazon worries. Last Friday, as we reviewed L’Oreal’s conference call, company commentary pointed to potentially softer trends in the US beauty market. If our read of L’Oreal’s assessment is accurate, this, coupled with increased department store discounting, could suggest a less robust US beauty market. As a result, we now view the backdrop as more challenging for Ulta to deliver the same level of comp and earnings upside investors have grown accustomed to.

The downgrade pointed out recent data indicating less luster in the U.S. beauty market. Still, the analysts did note that they have not received all supplier reports yet. They believe that softer commentary from L’Oreal, along with an increasing promotional activity from the department store channel and more difficult year-over-year comparisons, could now signal a potentially more challenging beauty backdrop looking ahead.

And the upside/downside risk just does not look that attractive after its updated assessment. The downside support is now seen around $230, and the upside level is seen close to $270 over the next 12 months to 18 months. That being said, Oppenheimer did note that Ulta is still positioned to win and deliver industry-leading growth — but the analysts are now less confident in Ulta’s ability to sustain earnings multiples in the 30-times range.

Ulta shares were last seen trading down just 0.7% at $246.63 on Monday in the middle of the day. Its 52-week trading range is $225.13 to $314.86, and the prior consensus analyst target price from Thomson Reuters was $324.45.

If Oppenheimer’s view of softening in the U.S. beauty market turns out to be true and not just a blip, then more analysts may be trimming their price targets ahead, even if they hold on to their bullish official Buy/Outperform ratings.

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