In a report published Monday, Jefferies’s analysts upgraded their rating on Wal-Mart stock from ‘Hold’ to ‘Buy’, and raised their price target from $62 to $80. Firm said the retailer’s store investments are yielding broadly improved store conditions and that this improvements should lead to upside in sales and an upward EPS revision cycle.
Over the past few months, the Arkansas-based company, which for a long time has been perceived as a low-wage employer, has raised wages and improved its inventory management, vendor terms and grocery sourcing.
“We think there are a few things that could move shares higher and improving U.S. store sales momentum is the biggest and most impactful to the bottom line,” analysts added.
Shares of Wal-Mart Stores Inc. (WMT) began trading this morning at 71.24, 1.20% higher from the prior days close of $70.87. On an intraday basis they have gotten as low as $71.10 and as high as $71.58.
On valuation measures, WMT shares are currently priced at 15.75x this year’s forecasted earnings, compared to the industry’s 7.55x earnings multiple. The company’s current year and next year EPS growth estimates stand at (7.20%) and 3.80%, compared to the industry growth rates of 8.00% and 17.70%, respectively. WMT has a t-12 price/sales ratio of 0.46. EPS for the same period registers at 4.52.
WMT’s shares have advanced 6.25% in the last 4 weeks and 7.69% in the past three months. Over the past 5 trading sessions the stock has gained 0.03%. The $223.64 billion market cap company has a median Street price target of $69.00 with a high target of $81.00.
WMT is down 1.53% year-over-year ; up 17.32% year-to-date.