Courtesy of Benzinga.
Wal-Mart Stores, Inc. (NYSE: WMT) continues to invest in its pricing, which is triggering headaches for many of its traditional and non-traditional peers.
Daniel Binder, a consumer and retailer analyst at Jefferies, commented in a research note on Monday that his August pricing work shows Wal-Mart has widened the gap with most competitors. Specifically, data gathered in the Charlotte, Houston and Phoenix markets show Wal-Mart’s price advantage “widened” against dollar store chains including Dollar General Corp. (NYSE: DG) and Family Dollar.
“Given the regional nature of price investment, we may not capture the full impact of what WMT is doing, but recent data shows it continues,” Binder wrote. “DG had some price cuts during the observed periods too, but not as significant. Family Dollar has been less aggressive.”
Binder acknowledged that Wal-Mart benefited in the second quarter from better terms with its vendors, lower transportation costs, lower shrink and lower markdowns. In addition, the analyst “would not be surprised” if the retailing giant details to investors additional cost out initiatives in October during its analyst day to fund additional price investment activities.
Binder also noted that within the grocery space, Wal-Mart introduced price cuts in all three of the markets that compare favorably to Target Corporation (NYSE: TGT), which was flattish. Traditional grocers were mostly flat to slightly up.
Finally, within the non-grocery space, Target narrowed the gap to Wal-Mart but Wal-Mart could “step up” with its seasonal business in the fall and holiday season.
Shares of Wal-Mart remain Buy rated with an unchanged $86 price target.
Full ratings data available on Benzinga Pro.
Do you have ideas for articles/interviews you’d like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!
Latest Ratings for WMT
Date | Firm | Action | From | To |
---|---|---|---|---|
Sep 2016 | Cowen & Co. | Upgrades | Market Perform | Outperform |
Aug 2016 | BMO Capital | Maintains | Underperform | |
Aug 2016 | Jefferies | Maintains | Buy |
View More Analyst Ratings for WMT
View the Latest Analyst Ratings
Posted-In: Daniel BinderAnalyst Color Long Ideas News Reiteration Analyst Ratings Movers Trading Ideas Best of Benzinga