Wal-Mart's Valuation High, But Baird Still Sees Defensive Appeal

Baird provided its outlook on Wal-Mart Stores, Inc. WMT, after meeting with key members of Walmart-U.S. and IR.

"With 8/7 consecutive quarters of positive comps/traffic, momentum has clearly returned to Walmart-U.S," wrote Baird, stating that progress has been steady/broad-based across the store and country as investments in associates, processes, and price are working together to drive improved customer satisfaction and sales.

According to the analysts, while absolute valuation metrics are nearing highs (~16.5x NTM P/E), relative reads (vs. S&P500/Staples) are more consistent with historical trends, and positive comp/traffic momentum appears poised to continue with several productivity initiatives still on tap.

The analysts maintained their Outperform rating and $80 price target.