Holiday shoppers are seeking value this year, are more selective, says TD Cowen's Oliver Chen

Retail Sector Trends - Consumers are being choiceful, seeking value and joy, but facing mixed confidence and financial struggles [1][3] - A bifurcation exists in the market, with intense pressure at the middle and low end, while higher household income customers are driving spending [3] - The holiday promotion season has extended to 3-4 weeks, resembling "Black November" with planned deals and tighter inventory management by retailers [8][9][10] Company Specific Insights - Walmart benefits from consumers seeking value and everyday low prices, capturing both value-oriented and high-income shoppers, with a significant technology story including digital advertising and marketplace [2] - Costco is viewed favorably due to its resilient, vertically integrated business model with global expansion, strong membership renewal rates (93%), and iconic brands like Kirkland [5][6] - Costco's valuation, at a 44x PE ratio, is considered expensive but potentially worth it due to industry-leading comps and traffic, with potential to reach 50x+ [6] E-commerce and Technology - Technology plays a crucial role, with Walmart leveraging digital advertising and its marketplace [2] - Costco has opportunities to enhance its marketplace and e-commerce capabilities [5] - The shopping experience is evolving towards a more relaxed, omnichannel approach, with less dramatic excitement compared to past "stampedes" [10]