Cowen analyst Oliver Chen said he believes a "retail rebirth" is underway. He noted all of the mall vacancies from large store closings, which are at the highest level since 2010, but expects a combination of retailers new to malls - like Dave and Busters (PLAY) and IMAX (IMAX) theaters - as well as bowling alleys, food and beverage concepts such as Eataly and Whole Foods (WFM) and deep value retailers such as Primark to fill a void. He also believes growing retailers, such as Ulta Beauty (ULTA), TJX, (TJX), and Burlington Stores (BURL), may help malls fill their vacancies. The mall mix is increasing to 20% food and entertainment, up from 10% previously, he added. Of the about 1,150 malls in the U.S., the about 44% classified B- and below are in weakening positions and malls generating productivity below $480 sales per square foot are most at risk for closure, added Chen.

Wells Fargo lowered the firm's price target on Ulta Beauty to $350 from $450 and keeps an Underweight rating on the shares. The category is slowing faster than anticipated as the competitive backdrop has become more challenging, the firm says. Margins will likely continue to erode as the need to invest accelerates, Wells adds.