shares rose nearly 5% Monday after
Banc of America Securities
launched coverage of the retailer with a buy rating. Wal-Mart also said in its regular recorded message for investors that weekly sales are meeting expectations.
In a research note, B of A analyst Thomas Tashjian said he expects Wal-Mart to show earnings-per-share growth of 16% in the current fiscal year and 15%-17% thereafter. He set a price target of $62, which he expects the company will reach "when retailers return to favor." B of A hasn't recently underwritten for the Bentonville, Ark., retail behemoth.
And that's the million-dollar question: When will retailers really make up the ground they've lost this year? True, the Fed seems to be done raising interest rates for the next while. But if consumers aren't tapped out, they're still picky when it comes to apparel, as tepid back-to-school sales have shown. There just doesn't seem to be much excitement about what's in the stores these days, and usually reliable retailers like
have seen their sales results react accordingly.
Wal-Mart, with its increasing selection of food and consumables, is more immune to the vagaries of fashion than specialty retailers, however. And its shares have already edged up in September, though they remain about 28% off their highs. Tashjian's note today helped push the stock up $2.38, or 4.6%, to $54.50.
Also helping Wal-Mart's shares: The company said on its weekly recorded sales message that same-store sales last week met expectations of a 4% to 6% gain. September started strong because of the Labor Day holiday, Wal-Mart said, though it still expects sales gains for the month to come in at the low end of its 4%-6% guidance. That's low compared to last year, but given the state of retail investing today, it's apparently cause enough for optimism.