Walmart Inc. (WMT) shares traded higher in Wednesday after the world's biggest retailer was upgraded to 'overweight' by investment bank Morgan Stanley while its European rival, Carrefour SA (CRRFY) , posted solid fourth quarter sales and near-term earnings guidance.
Morgan Stanley analyst Simeon Gutman lifted his rating on the stock to 'overweight' from neutral, with a price target of $110 per share, a moved the followed strong gains for European retailers after French giant Carrefour said revenues for the three months ending in December came in at €22.6 billion, defying concerns that weeks of protests in Paris and elsewhere had impacted sales for the region's biggest grocery store chain.
Walmart deserves to be benchmarked against higher-multiple consumer packaged goods stocks given its improving sales/earnings trajectory and consistency; and its defensive nature limits downside risk," Gutman said. "We believe Walmart U.S. will be one of few retailers to grow earnings in 2019."
Walmart shares rose 1.3% to $98.71 by the close of trading on Wednesday, a move that extends the stock's three-month gain to around 12.6% and value the Bentonville, Arkansas-based retail giant at just under $288 billion.
European retail stocks were also on the rise, thanks to a 6.55% gain for Carrefour, with the Stoxx Europe Retail subindex hitting a seven week high of 297.36 points.
Walmart was also named as a possible suitor for the core online market business of eBay Inc. (EBAY) , whose shares rocketed Tuesday after activist investor Elliott Management unveiled a 4% stake in the group and wrote a letter to the board of directors demanding significant changes.
Watch Behind the Smile: Inside Walmart
CNBC reported that Elliott thinks Walmart or Google (GOOGL) , alongside several private equity firms, could be interested in eBay's core business if it sells its StubHub ticketing division or its classified advertising business.
"Elliott believes that eBay is worth far more - but change is urgently needed to address both public perceptions and real business issues," the letter said, adding that Elliott wants eBay to engage in a "full operation review of how it spends and develops its funds", with an aim to increase operating expenses by $250 million from 2018 to 2021.
It also said StubHub has a value of between $3.5 billion and $4.5 billion, compared to a range of $8 billion to $12 billion for the group's classified advertising division.
eBay said Tuesday that it would "carefully review" proposals from an activist investors, Elliott Management, after a letter outlining significant changes to its business model pushed shares to the highest level in four months.