Wal-Mart Upgraded To Strong Buy At Raymond James, Firm Cites 'Price Action And Valuation'

Courtesy of Benzinga.

In a report published Monday, Raymond James analyst Budd Bugatch upgraded the rating on Wal-Mart Stores Inc (NYSE: WMT) from Outperform to Strong Buy, with a price target of $86.

Wal-Mart’s shares have declined by 19 percent since reaching an all-time high of $90 in January, and have underperformed the SPX by 15 percent in the current year so far. Analyst Budd Bugatch believes that the current share price already reflects the risks associated with Wal-Mart and is lower than the company’s intrinsic worth.

In the report Raymond James noted, “…risk/reward of this mega-cap issue now strongly favors reward over incremental price risk, given that most, if not all, of the bad news seems known and priced into its current price.”

Wal-Mart is committed to improving customer shopping experience by investing in both technology and people. “These initiatives do not come without cost, however. Management expects a cumulative F2015 EPS drag of $0.29 to $0.31 related to increasing associate wages and training, e-commerce investments, and a projected $14 billion top-line drag from currency translation,” Bugatch mentioned.

The company also announced the retirement of Rob Walton as board chairman and the appointment of his son-in-law Greg Penner as the new chairman.

Posted-In: Raymond JamesAnalyst Color Upgrades Analyst Ratings