As retailers continue to feel threatened by Amazon.com, Inc. AMZN, Goldman Sachs analyst Matthew Fassler still sees Wal-Mart Stores Inc WMT as “well-positioned.”
“We believe that the company is as well positioned as any mass market retailer — in an admittedly imperfect world for mass market retailers — to cope with increasing demands on ecommerce and technology spend, weather Amazon’s growth and its increased focus on consumables, and maintain its franchise. We see merits in Walmart’s front-loaded investment, scale, capacity for additional investment, small-market focus, and current impressive inventory discipline,” he wrote.
Fassler upgraded Walmart to Buy with an $84 price target and added it to Goldman’s Conviction List.
5 Reasons Why Fassler Is Bullish On Walmart
- He likes Walmart’s small market focus and believes it puts the company at less risk to competition in the grocery space.
- Walmart’s investment in technology and e-commerce as well as the company’s plans to emerge as a leader in the 3-P marketplace.
- Strong working capital management.
- Inflation in food has bottomed out.
- Walmart has a relatively low P/E ratio.
Walmart shares were trading up 1.55 percent, at $76.21 during Friday’s trading session. To read the latest news and exclusive coverage on Walmart check out the Benzinga Pro news feed.
_________ Image Credit: By Walmart Corporate from Bentonville, USA (Walmart store exterior) [CC BY 2.0 (http://creativecommons.org/licenses/by/2.0)], via Wikimedia Commons
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