Raymond James signals a beauty‑sector tilt for 2026 as global consumption slows. The firm flags higher‑quality names with clear growth plans and disciplined cost cuts as best positioned to weather weaker demand. With U.S. consumer spending uneven and China’s recovery sluggish, investors should focus on resilient brands.

Key picks include Ulta Beauty, upgraded to Strong Buy after a heavy investment phase, and Estée Lauder and elf, both rated Strong Buy. The team cites faster fiscal‑2026 growth, store upgrades, and operational changes as drivers. Tariffs remain a steady cost burden, though legal challenges may ease pressure later.

Valuations have slipped in 2025 as investors trimmed inventory and adjusted to tariffs, but the reset is largely reflected in prices. In 2026, returns hinge on execution, margin improvement, and product mix shifts. Watch for policy support and restructuring programs that could lift earnings in the second half.

Analysts note that beauty brands with strong e‑commerce platforms and premium pricing can offset slower foot traffic. Investors should monitor quarterly guidance for sales momentum and cost‑control milestones. A rebound in discretionary spending later in 2026 could boost margins, making these stocks attractive for value‑seeking portfolios.