'Well-Positioned' Walmart Added To Goldman's Conviction List

As retailers continue to feel threatened by Amazon.com, Inc. AMZN, Goldman Sachs analyst Matthew Fassler still sees Wal-Mart Stores Inc WMT as “well-positioned.”

“We believe that the company is as well positioned as any mass market retailer — in an admittedly imperfect world for mass market retailers — to cope with increasing demands on ecommerce and technology spend, weather Amazon’s growth and its increased focus on consumables, and maintain its franchise. We see merits in Walmart’s front-loaded investment, scale, capacity for additional investment, small-market focus, and current impressive inventory discipline,” he wrote.

Fassler upgraded Walmart to Buy with an $84 price target and added it to Goldman’s Conviction List.

5 Reasons Why Fassler Is Bullish On Walmart

• He likes Walmart’s small market focus and believes it puts the company at less risk to competition in the grocery space.
• Walmart’s investment in technology and e-commerce as well as the company’s plans to emerge as a leader in the 3-P marketplace.
• Strong working capital management.
• Inflation in food has bottomed out.
• Walmart has a relatively low P/E ratio.

Walmart shares were trading up 1.55 percent, at $76.21 during Friday’s trading session. To read the latest news and exclusive coverage on Walmart check out the Benzinga Pro news feed.