NEW YORK (TheStreet) -- Shares of Walmart Stores (WMT) - Get Report are down 0.54% to $85.48 after the company was accused by investors of allegedly ignoring a court order to turn over more internal files on what directors knew about claims that officials doled out bribes to facilitate Mexican real estate deals in an effort to expand the chain's presence in the country, Bloomberg reports.
Walmart should be ordered to pay more than $1 million in sanctions for allegedly ignoring the Delaware Chancery Court judge's order, according to an Indiana Electrical Workers Pension Trust Fund IBEW, which contends Walmart directors did not properly oversee company operations, Bloomberg said.
Walmart said it has spent the past two years investigating allegations of bribery and corruption in Mexico and other countries, and is cooperating with a federal probe into those claims, according to Bloomberg.
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In April, it said it had racked up legal fees and compliance costs of more than $400 million so far, and estimated it could spend as much as $240 million this year, Bloomberg added.
Separately, Enrique Ostalé will assume the CEO role at Walmart's Mexican and Central American operation, Walmart de Mexico, in January, which accounts for about 6% of Walmart's annual sales, the Wall Street Journal reports.
TheStreet Ratings team rates WAL-MART STORES INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate WAL-MART STORES INC (WMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, increase in stock price during the past year, growth in earnings per share and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- WMT's revenue growth has slightly outpaced the industry average of 1.2%. Since the same quarter one year prior, revenues slightly increased by 2.9%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
- Net operating cash flow has significantly increased by 72.54% to $3,570.00 million when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 31.91%.
- The stock price has risen over the past year, but, despite its earnings growth and some other positive factors, it has underperformed the S&P 500 so far. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- WAL-MART STORES INC reported flat earnings per share in the most recent quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, WAL-MART STORES INC reported lower earnings of $4.86 versus $5.01 in the prior year. This year, the market expects an improvement in earnings ($5.00 versus $4.86).
- You can view the full analysis from the report here: WMT Ratings Report