Analysis of Benzinga's 2025 Holiday Season Retail Stock Picks (ULTA, AMZN, COST)

This analysis is based on a Benzinga article [1] published on December 1, 2025, which highlighted Ulta Beauty (NASDAQ: ULTA), Amazon.com (NASDAQ: AMZN), and Costco Wholesale (NASDAQ: COST) as top retail stock picks for the holiday season. The article cited the National Retail Federation’s (NRF) forecast that U.S. holiday retail sales (November-December) would exceed $1 trillion for the first time, projected to grow 3.7-4.2% year-over-year [2][3][4][5].
On December 1, ULTA experienced a notable 1.72% gain, closing at $547.64, with trading volume (713,546 shares) 20.8% higher than its 50-day average, indicating increased investor interest [0]. AMZN posted a modest 0.28% increase (closing at $233.88) with volume slightly below its 50-day average, while COST declined 0.14% (closing at $911.96) also with below-average volume [0]. The Consumer Cyclical sector, which includes retail, rose 0.56% that day, reflecting overall positive market sentiment [0].
Valuation metrics show ULTA has a relatively low P/E ratio of 21.04, suggesting potential undervaluation compared to AMZN (32.99) and COST (50.16) [0]. COST’s high P/E is supported by its strong membership model, which contributes 73% of its operating profit [1][0]. Price trends indicate ULTA has risen 10.31% since November 20, while AMZN recovered 7.7% from its November 20 low, and COST traded flat (up 1.95% from its November 17 low) [0].

Cross-domain correlations reveal that ULTA’s recent upward momentum and low valuation make it stand out among the three picks, likely driving the strong investor response to the article [0]. COST’s high P/E ratio, despite its profitable membership model, may explain the lack of positive price movement, as investors may view it as already fully valued [0]. The broader Consumer Cyclical sector’s gain aligns with the NRF’s positive sales forecast, indicating market confidence in holiday retail performance [0][2-5]. The modest movement of AMZN, a dominant e-commerce player, may be due to its diverse business segments extending beyond holiday retail, diluting the impact of sector-specific sentiment [0].

Risks include the dependency of many retailers on holiday sales (20-30% of annual revenue), meaning missed projections could significantly impact stock prices [1]. COST’s high P/E ratio (50.16) leaves it vulnerable to price corrections if sales growth fails to meet investor expectations [0]. Intense competitive pressure, especially in e-commerce for AMZN, and potential supply chain disruptions also pose risks [1].
Opportunities include ULTA’s undervaluation and recent upward trend, which could attract further investor interest [0]. The NRF’s $1 trillion+ sales forecast may drive continued sector-wide gains, benefiting all three stocks [2-5]. AMZN’s e-commerce dominance positions it well to capitalize on online holiday spending, while COST’s loyal membership base could support consistent sales [1][0].

The analysis summarizes Benzinga’s holiday retail stock picks and their immediate market performance on December 1, 2025. ULTA saw strong gains with above-average volume, AMZN rose modestly, and COST declined slightly. Valuation metrics highlight ULTA’s potential undervaluation and COST’s high P/E ratio. The Consumer Cyclical sector showed positive sentiment, supported by the NRF’s $1 trillion sales forecast. Decision-makers should consider the risks of holiday sales dependency, valuation, competition, and supply chains, alongside opportunities from sector momentum and company-specific strengths.