Zacks Investment Research Downgrades Wal-Mart Stores, Inc. (NYSE:WMT) to Hold

Wal-Mart Stores, Inc. (NYSE:WMT) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a research note issued to investors on Tuesday, October 17th.

According to Zacks, “Share price of Walmart has been outperforming the industry on a year-to-date basis, as the company is pushing itself to understand the evolving needs of its customers and expand itself in both brick-and-mortar space as well as e-commerce activities. On one hand, the company is posting positive comps at Walmart U.S. for 12 successive quarters, on the other hand, it is also building its e-commerce capabilities through acquisitions and growing in the online grocery and delivery market. The company therefore expects sales to rise approximately 3% during fiscal 2019, backed by the sustained growth in comps and e-commerce. However, the company still faces headwinds such as unfavorable currency, stiff competition from both brick & mortar and online retailers and huge expenses related to e-commerce investments. Nevertheless, the company makes efforts to offset these headwinds with its initiatives to boost sales.”

Several other research firms have also recently commented on WMT. BidaskClub upgraded Wal-Mart Stores from a “hold” rating to a “buy” rating in a report on Monday, July 31st. Morningstar, Inc. restated a “neutral” rating on shares of Wal-Mart Stores in a report on Wednesday, August 2nd. Vetr cut Wal-Mart Stores from a “sell” rating to a “strong sell” rating and set a $64.26 price target for the company. in a report on Monday, July 17th. Citigroup Inc. lifted their price target on Wal-Mart Stores from $78.00 to $80.00 and gave the company a “neutral” rating in a report on Tuesday, August 15th. Finally, Goldman Sachs Group, Inc. (The) set a $87.00 target price on Wal-Mart Stores and gave the stock a “buy” rating in a report on Tuesday, October 3rd. Three investment analysts have rated the stock with a sell rating, seventeen have issued a hold rating, fifteen have assigned a buy rating and one has issued a strong buy rating to the company. The company currently has an average rating of “Hold” and a consensus target price of $84.77.

Wal-Mart Stores (NYSE:WMT) opened at 88.17 on Tuesday. Wal-Mart Stores has a 52-week low of $65.28 and a 52-week high of $88.92. The firm has a 50-day moving average of $81.89 and a 200-day moving average of $78.50. The firm has a market cap of $263.38 billion, a PE ratio of 21.18 and a beta of 0.29.

Wal-Mart Stores (NYSE:WMT) last posted its quarterly earnings results on Thursday, August 17th. The retailer reported $1.08 EPS for the quarter, beating the consensus estimate of $1.07 by $0.01. The company had revenue of $123.40 billion during the quarter, compared to analysts’ expectations of $121.86 billion. Wal-Mart Stores had a return on equity of 16.87% and a net margin of 2.60%. The firm’s revenue was up 2.1% on a year-over-year basis. During the same quarter in the previous year, the business earned $1.07 EPS. Equities analysts anticipate that Wal-Mart Stores will post $4.37 EPS for the current year.

Wal-Mart Stores declared that its Board of Directors has approved a share buyback program on Tuesday, October 10th that authorizes the company to buyback $20.00 billion in shares. This buyback authorization authorizes the retailer to repurchase shares of its stock through open market purchases. Stock buyback programs are generally an indication that the company’s board of directors believes its shares are undervalued.

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In related news, major shareholder Jim C. Walton sold 775,958 shares of the company’s stock in a transaction on Thursday, August 24th. The stock was sold at an average price of $80.24, for a total transaction of $62,262,869.92. Following the completion of the transaction, the insider now directly owns 10,507,224 shares in the company, valued at approximately $843,099,653.76. The sale was disclosed in a document filed with the SEC, which is available through this link. Also, Director S Robson Walton sold 646,330 shares of the company’s stock in a transaction on Wednesday, August 23rd. The stock was sold at an average price of $80.20, for a total value of $51,835,666.00. Following the transaction, the director now owns 3,344,956 shares of the company’s stock, valued at $268,265,471.20. The disclosure for this sale can be found here. Over the last 90 days, insiders have sold 9,924,828 shares of company stock valued at $785,676,492. 51.39% of the stock is owned by company insiders.

Institutional investors and hedge funds have recently modified their holdings of the stock. Winfield Associates Inc. grew its stake in Wal-Mart Stores by 5.8% during the 2nd quarter. Winfield Associates Inc. now owns 1,373 shares of the retailer’s stock worth $104,000 after buying an additional 75 shares during the last quarter. Genovese Burford & Brothers Wealth & Retirement Plan Management LLC grew its stake in shares of Wal-Mart Stores by 3.3% in the second quarter. Genovese Burford & Brothers Wealth & Retirement Plan Management LLC now owns 1,429 shares of the retailer’s stock worth $108,000 after purchasing an additional 45 shares in the last quarter. TrimTabs Asset Management LLC grew its stake in shares of Wal-Mart Stores by 89.2% in the first quarter. TrimTabs Asset Management LLC now owns 1,476 shares of the retailer’s stock worth $106,000 after purchasing an additional 696 shares in the last quarter. Thompson Davis & CO. Inc. grew its stake in shares of Wal-Mart Stores by 456.9% in the second quarter. Thompson Davis & CO. Inc. now owns 1,526 shares of the retailer’s stock worth $115,000 after purchasing an additional 1,252 shares in the last quarter. Finally, Hudock Capital Group LLC grew its stake in shares of Wal-Mart Stores by 0.4% in the second quarter. Hudock Capital Group LLC now owns 1,847 shares of the retailer’s stock worth $139,000 after purchasing an additional 7 shares in the last quarter. Hedge funds and other institutional investors own 30.16% of the company’s stock.

Wal-Mart Stores Company Profile

Wal-Mart Stores, Inc is engaged in the operation of retail, wholesale and other units in various formats around the world. The Company operates through three segments: Walmart U.S., Walmart International and Sam’s Club. The Walmart U.S. segment includes its mass merchant concept in the United States operating under the Walmart or Wal-Mart brands, as well as digital retail.

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