UPDATE: Citigroup Initiates Coverage On Wal-Mart Stores, Inc.

In a note released Monday morning, Citigroup analyst Oliver Chen initiated coverage of Wal-Mart Stores, Inc. WMT with a Neutral rating and an $83 price target.

Chen wrote, "We believe the stock could be range bound and we rate Wal-Mart Neutral given: the lack of potential upside at the core US business (75 percent EBIT) and that international and online expansion plans are a near-term earnings headwind."

Chen believes Wal-Mart will continue to struggle in the United States given the lack of wage inflation for its core customer base, despite an improving GDP.

Looking ahead, Chen is predicting an EPS of $1.16 for the third quarter and $5.02 for fiscal 2015.