Telsey Advisory Group Upgrades Wal-Mart Stores To Outperform, Sees Nearly 15% Upside To Stock’s Price

Written by StockNews.com

Wal-Mart Stores Inc. (NYSE: WMT) hasn’t received too much love from Wall Street analysts as of late, but one firm has finally stepped up today with an upgrade of the retail superpower.

Telsey Advisory Group lifted its rating on WMT to Outperform from Market Perform, while boosting its price target to $82 from $73. That new target suggests a nearly 15% upside to the stock’s Thursday closing price of $71.42.

Telsey said it made the bullish move based on four key factors:

E-commerce, which is driving a company-wide transformation,

The fact that WMT is “on offense” with its grocery and private brands,

Continuing price investment, and

WMT’s productivity loop finally regaining traction.

The firm feels WMT:

is regaining its dominance in physical retail,

is exerting some new prowess in digital commerce as well [and that] these trends are evidenced by better sales growth in the past few quarters…

has increased focus on:

food and e-commerce,
price investments,
and the customer experience,

[which] all point to a winning formula to gain market share and transform the business model for growth in a digital world. The company’s productivity loop should also return as SG&A spending levels off, said the firm.

Finally, Telsey also expects a re-energized Sam’s Club with new leadership and initiatives, combined with improvements in international markets, should both contribute to growth in coming quarters.

…Year-to-date, WMT has gained 5.46%, versus a 5.68% rise in the benchmark S&P 500 index during the same period.

WMT currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #1 of 21 stocks in the Grocery/Big Box Retailers category.