"We generally prefer broad-line and other positive traffic retailers, which are better positioned for a potential downturn, well-capitalized for digital innovation, can handle tariffs, and offer customers compelling price to value," a team led by analyst Oliver Chen said in a Sept. 26 report.
Chen rated all three companies outperform.
He raised the Minneapolis company to the No. 1 position in the Conviction List, lifting the price target to $130 from $120.
"Despite Target's strong stock run, with [the] shares up more than 63% year-to-date, we are incrementally more upbeat following strong recent results and an improved margin outlook," the analysts wrote.
Target stock is relatively cheap, given the company's "strong physical and digital growth and a more stable margin outlook."
Cowen moved each of the three stocks up one notch on the list. Displaced at the top was Ulta (ULTA - Get Report) , which fell to No. 7 "following challenging 2Q19 results in conjunction with lower visibility into the beauty-innovation cycle," Chen wrote.
Target shares traded off 0.5% at $106.29. Walmart, Bentonville, Ark., eased 0.1% to $118.30.
Boot Barn, the Irvine, Calif., retailer focused on western and work-related footwear, apparel and accessories, was up 1.7% at $36.14.
And Ulta, the Bolingbrook, Ill., retailer of cosmetics and beauty products, traded up 0.3% at $236.31.
Save 57% During Our Fall Sale. Join Jim Cramer's Action Alerts PLUS investment club to become a smarter investor. Click here to sign up and save!