Analyst Boosts Price Objectives On Wal-Mart Stores Inc, Target Corp.

Big box retailers should get a boost from an improving U.S. economy, but burgeoning capital spending and competition from Amazon.com Inc.

leaves an analyst cautious. Deutsche Bank's Paul Trussell maintained Neutral ratings Tuesday on both Wal-Mart Stores Inc.

and Target Corp.

, although he raised is price targets on each company substantially. Trussell sees earnings growth at both companies held back as the companies invest heavily in Internet commerce operations while striving to keep retail prices low. Same-store sales growth of 3 percent at Target in December were in line with expectations but its two-year trend continues sluggish. Yet Target results should benefit from online holiday sales growth of 40 percent and from a shift in talent and capital toward the U.S. as the company shuts down its ill-fated Canada operations. Trussell raised his price objective on Target 30 percent to $77. Target's earnings, slated for Feb. 25 are expected at $1.45 a share on sales of $21.69 billion, according to the currebt Wall Street consensus. At Wal-Mart, "there's no magic bullet" to boost comps, which Trussell forecast will grow at 1 percent in the fourth quarter. But lower gasoline prices should spur consumer spending and food inflation will help Wal-Mart's top line. Moreover an improved outlook for small businesses is positive for the company's Sams Club unit, according to the analyst. Trussell raised his target on Wal-Mart by 13 percent to $86. The company is expected to post earnings Feb. 19 of $1.53 cents a share on sales of $132.75 billion.