UBS 'Rolls Back' Rating On Wal-Mart Due To Valuation

Michael Lasser downgraded shares of

to Neutral from Buy on Thursday with an unchanged $91 price target. Lasser states his downgrade is due to valuation reasons. The analyst notes that shares have risen 11 percent last month and its next twelve month (NTM) multiple expanded to a 16.4 multiple from a previous 14.6. “At this level, we think shares present equal upside and downside,” Lasser wrote in a note. The analyst adds that the company does have “momentum working in its favor” as management is taking “prudent and pragmatic” steps to “take business to the next level,” Lasser states that Wal-Mart is among one of the “most esteemed set of assets” within retail and the company is exploiting its advantage which will generate mid-to-high single digit earnings growth over time. The analyst also notes that recent declines in gas prices should help the company's sales, although this fact may already be priced in to shares as the stock has added roughly $25 billion of market cap during November. Lasser concludes by stating that Wal-Mart faces an “intensely challenging landscape” and that while the company is keeping up with competition it will just get harder as its peers “raise their game.”