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Investing.com - TD Cowen has identified Walmart (NYSE:WMT) and Ulta Beauty (NASDAQ:ULTA) as well-positioned retailers as artificial intelligence increasingly influences grocery shopping patterns. Ulta Beauty, with its impressive market capitalization of $25.16 billion and annual revenue of $11.65 billion, has demonstrated strong market performance with a 56.33% return over the past year.
The firm notes that AI in grocery is evolving "from predictive to prescriptive" while becoming more adaptive and executing actions faster. According to SimilarWeb data cited by TD Cowen, referrals from ChatGPT.com have increased 20-50% month-over-month for both Walmart and Ulta Beauty. Based on InvestingPro analysis, Ulta currently trades at a P/E ratio of 21.69 and is trading near its 52-week high of $572.23, suggesting investor confidence in its strategic positioning.
TD Cowen suggests power in retail will shift toward companies with superior first-party data, high traffic frequency, testing capabilities, and diverse partnerships. The firm describes the transition as "Mobile was the New Mall...Chat the New Checkout," indicating that large language models are becoming significant drivers of product discovery. Want deeper insights? InvestingPro offers exclusive analysis and 10+ additional ProTips for Ulta Beauty, helping investors make informed decisions in this evolving retail landscape.
Walmart’s AI initiatives have particularly impressed TD Cowen, with the firm highlighting the retailer’s "customer-facing and internal initiatives underpinned by WMT+ loyalty program," which is estimated to have approximately 30 million members. The firm specifically cites Walmart’s "C-suite level commitment" to AI adoption.
TD Cowen distinguishes agentic AI from other forms, explaining it can "perceive, decide, and execute tasks" autonomously across complex workflows, enabling retailers to create "a self-optimizing ecosystem where intelligence flows between functions" for improved operations. According to InvestingPro’s Financial Health assessment, Ulta Beauty maintains a "GREAT" overall score of 3.08, suggesting strong operational efficiency in implementing these technological advances.
In other recent news, Ulta Beauty has been the focus of several analyst firms, highlighting its strong performance and strategic initiatives. Canaccord Genuity raised its price target for Ulta Beauty to $653, maintaining a Buy rating after an in-person store tour. This decision reflects the company’s efforts to enhance customer experience through improved merchandising and a robust loyalty program. UBS also reiterated its Buy rating, setting a price target of $680, citing the strong performance of Ulta’s new leadership team and improving industry conditions. DA Davidson echoed this sentiment, maintaining a Buy rating with a $625 price target, noting the company’s prominent presence in recent news following its earnings report in late August. Piper Sandler reaffirmed its Overweight rating with a $590 price target, highlighting Ulta’s accelerating comparable sales in the first half of 2025, with a notable 6.7% growth in the second quarter. These recent developments indicate a positive outlook from analysts for Ulta Beauty in the competitive beauty retail sector.
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