Zacks Investment Research Lowers Wal-Mart Stores (WMT) to Hold
Wal-Mart Stores (NYSE:WMT) was downgraded by Zacks Investment Research from a “buy” rating to a “hold” rating in a report issued on Saturday.
According to Zacks, “Wal-Mart Stores, which recently announced plans to drop the “hyphen” and “stores” from its name to officially emerge as an omnichannel retailer, has surpassed the industry in a year. The company has been riding on its robust past record, which derives strength from constant e-commerce initiatives, like buyouts, alliances, surging grocery business and improved delivery systems. Thanks to these trends, along with solid traffic, Walmart’s third-quarter fiscal 2018 marked its ninth and 13th straight quarter of positive earnings surprise and comps growth, respectively. Also, the company’s international business remains a growth driver. However, costs associated with technological and e-commerce investments; mix impact from growing e-commerce operations and a compelling pricing strategy have been hurting Walmart’s gross margin for a while now. Stiff competition and volatile consumer spending also pose threats.”
A number of other brokerages have also commented on WMT. CIBC decreased their price target on shares of Wal-Mart Stores from $100.00 to $90.00 and set an “outperform” rating for the company in a research note on Wednesday, November 15th. Telsey Advisory Group reduced their target price on shares of Wal-Mart Stores from $108.00 to $96.00 and set an “outperform” rating for the company in a research note on Friday, November 17th. Citigroup upgraded shares of Wal-Mart Stores from a “neutral” rating to a “buy” rating and upped their target price for the stock from $106.00 to $117.00 in a research note on Tuesday, December 19th. Royal Bank of Canada upgraded shares of Wal-Mart Stores from an “underperform” rating to a “sector perform” rating and set a $96.00 target price for the company in a research note on Wednesday, November 29th. Finally, Goldman Sachs Group set a $87.00 target price on shares of Wal-Mart Stores and gave the stock a “buy” rating in a research note on Tuesday, October 3rd. One research analyst has rated the stock with a sell rating, twenty have assigned a hold rating, fourteen have given a buy rating and one has issued a strong buy rating to the company’s stock. The stock has a consensus rating of “Hold” and a consensus price target of $96.81.
Wal-Mart Stores (NYSE:WMT) last announced its quarterly earnings results on Thursday, November 16th. The retailer reported $1.00 EPS for the quarter, beating the Zacks’ consensus estimate of $0.97 by $0.03. The business had revenue of $122.14 billion during the quarter, compared to analyst estimates of $120.23 billion. Wal-Mart Stores had a net margin of 2.31% and a return on equity of 16.92%. Wal-Mart Stores’s quarterly revenue was up 4.2% on a year-over-year basis. During the same quarter in the previous year, the business posted $0.98 EPS. research analysts anticipate that Wal-Mart Stores will post 4.43 EPS for the current year.
Wal-Mart Stores announced that its board has approved a stock buyback plan on Tuesday, October 10th that allows the company to buyback $20.00 billion in outstanding shares. This buyback authorization allows the retailer to repurchase shares of its stock through open market purchases. Shares buyback plans are usually an indication that the company’s leadership believes its shares are undervalued.
In other Wal-Mart Stores news, major shareholder Alice L. Walton sold 2,900,679 shares of the company’s stock in a transaction dated Friday, November 17th. The shares were sold at an average price of $97.82, for a total transaction of $283,744,419.78. Following the sale, the insider now directly owns 6,748,580 shares of the company’s stock, valued at $660,146,095.60. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. Also, major shareholder Alice L. Walton sold 1,002,210 shares of the company’s stock in a transaction dated Monday, November 20th. The shares were sold at an average price of $96.23, for a total transaction of $96,442,668.30. Following the sale, the insider now directly owns 6,748,580 shares in the company, valued at $649,415,853.40. The disclosure for this sale can be found here. Over the last ninety days, insiders have sold 12,419,588 shares of company stock worth $1,207,333,538. Insiders own 51.39% of the company’s stock.
Several institutional investors have recently made changes to their positions in WMT. Private Asset Management Inc. increased its position in shares of Wal-Mart Stores by 20.1% in the fourth quarter. Private Asset Management Inc. now owns 7,165 shares of the retailer’s stock worth $708,000 after purchasing an additional 1,200 shares during the last quarter. Abner Herrman & Brock LLC increased its position in shares of Wal-Mart Stores by 223.9% in the fourth quarter. Abner Herrman & Brock LLC now owns 11,105 shares of the retailer’s stock worth $1,097,000 after purchasing an additional 7,677 shares during the last quarter. Lynch & Associates IN increased its position in shares of Wal-Mart Stores by 2.7% in the fourth quarter. Lynch & Associates IN now owns 55,510 shares of the retailer’s stock worth $5,482,000 after purchasing an additional 1,470 shares during the last quarter. Summit Financial Group Inc. bought a new position in Wal-Mart Stores during the fourth quarter valued at approximately $232,000. Finally, McQueen Ball & Associates Inc. bought a new position in Wal-Mart Stores during the fourth quarter valued at approximately $216,000. 30.58% of the stock is currently owned by hedge funds and other institutional investors.
About Wal-Mart Stores
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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