Wal-Mart Stores Inc WMT has stood its ground against e-commerce and discount rivals that are trampling retail peers.
It’s survived toy competitors, clothing competitors and grocery competitors. It’s earned Alphabet Inc GOOGL GOOG’s backing. It’s struck all-time highs.
But some on the Street think it’s about time for a breather.
The Rating
Goldman Sachs analyst Matthew Fassler downgraded Wal-Mart to Neutral while raising the price target from $91 to $100.
The Thesis
With buffering from diversification in store sites, product categories and customer demographics, Wal-Mart has been relatively invulnerable to traditional retail woes, according to Goldman Sachs.
“It is now delivering on the promise of this positioning, holding share against broader retail — and gaining share versus most grocers and apparel retailers; returning to productivity loop dynamics; and improving its working capital efficiency,” Fassler said in a Monday note. (See Fassler's track record here.)
In his estimation, Wal-Mart’s stock, up 39 percent year-to-date with stabilized trade trends, fully reflects its push for earnings growth and business investment in next-generation technologies and services.
Price Action
Wal-Mart’s stock fell 1.2 percent on the downgrade and traded at $96.27 at the time of publication.
Related Links:
Here's Why Walmart Is 'Under Siege,' And Not Just From Amazon
Walmart's Aggressive Online Expansion Should Please Investors
Amazon’s One Big Weakness Represents A Huge Opportunity For Walmart
Photo courtesy of Wal-Mart.
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