Market Overview

Morgan Stanley Weighs How Flipkart Changes Walmart's Global Stand Against Amazon

Share:
Morgan Stanley Weighs How Flipkart Changes Walmart's Global Stand Against Amazon

Walmart Inc (NYSE: WMT) announced last week it’s pursuing a 77-percent stake in the Indian e-commerce company Flipkart.

The resulting exposure to the Indian market would heighten global competition with Amazon.com, Inc. (NASDAQ: AMZN) — a steady presence in southern Asia.

The Rating

Morgan Stanley's Simeon Gutman and three other analysts maintained an Equal-Weight rating and $99 price target on Wal-Mart and an Overweight rating and $1,700 price target on Amazon.

The Thesis

The analysts consider the potential for a Flipkart IPO a “key buffer” for Walmart.

”[The] importance of demonstrating progress in Walmart’s U.S. business (particularly e-commerce) has magnified and cannot be understated,” the analysts said in a report. 

Morgan Stanley is ambivalent as to whether Walmart needs a presence in India.

The nation’s $21 billion in e-commerce sales represents just 1 percent of the global addressable market, although Morgan Stanley expects expansion to $200 billion — 12 percent of the worldwide total ― by 2026.

“India represents a significant long-term opportunity,” the analysts said.

They estimate Flipkart controls nearly double the share of online gross merchandise volume that Amazon does and is in a period of sustained growth. Its leadership in online smartphone sales is particularly notable considering the category accounts for about half of India’s total online sales, although smartphones yield low to negative gross margins.

Price Action

Amazon was up 0.29 percent Monday morning, while Walmart was trading higher by 1.16 percent. 

Related Links:

Advantages With India ETFs

Amazon Moving Retail Wars To An Unexpected Battleground: Physical Stores

Latest Ratings for AMZN

DateFirmActionFromTo
Apr 2019Initiates Coverage OnBuy
Mar 2019Initiates Coverage OnOutperform
Mar 2019UpgradesSector WeightOverweight

View More Analyst Ratings for AMZN
View the Latest Analyst Ratings

Posted-In: Flipkart Morgan Stanley Simeon GutmanAnalyst Color Emerging Markets Markets Analyst Ratings Best of Benzinga

 

Related Articles (AMZN + WMT)

View Comments and Join the Discussion!

Latest Ratings

StockFirmActionPT
EBAYMaintains34.5
WDCReiterates60.0
WATMaintains230.0
WRBMaintains56.0
MRVLMaintains29.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Trading Daily
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Thank You
for registering for Benzinga’s newsletters and alerts.
• The Daily Analysts Ratings email will be received daily between 7am and 10am.
• The Market in 5 Minutes email will be received daily between 7am and 8am.
• The Fintech Focus email will be received every Friday between 2pm and 5pm.

JPMorgan Cites Uncertainty In Xerox Downgrade

Trump Reverses Course On ZTE And Optical Stocks Follow