Deutsche Bank: Wal-Mart Is Now A Staple, Not a Retailer

Paul Trussell of Deutsche Bank had some interesting commentary on

following its third quarter results on Thursday. “Most retailers with zero earnings growth this year and likely next year as well, are not typically rewarded with multiple expansion,” Trussell wrote in a note on Thursday. “However, Wal-Mart is different than most retailers.” Trussell notes that Wal-Mart's differences stems from it being a consumer staple replacement providing yield and stability, but at a lower multiple average compared to Food stocks. The analyst adds that Wal-Mart is a play on the “low-end theme” as consumers strapped for cash are benefiting from lower energy and gas costs. Trussell also states that Wal-Mart is a “big box retailer going through a transformation” with a new management team and a revised focus on e-commerce, smaller store growth and a better in store experience. However, despite the top-line improvement seen in Wal-Mart's quarter results on Thursday, the company is facing a period of heavy investments which will continue for the foreseeable future. Shares are Hold rated with a price target raised to $76 from a previous $72.