NEW YORK (TheStreet) -- Shares of Walmart Stores (WMT) - Get Reportare declining, lower by 1.2% to $86.24 in midday trading Wednesday, after the retailer was downgraded to "neutral" from "overweight" by analysts at HSBC today.
Analysts at the firm also lowered its price target to $87 from $87.29 on shares of Walmart.
Walmart said today that it will invest about $269 million this fiscal year to complete 29 supercenters in Canada, lower than what it had budgeted for last year. The company's plans also include the expansion of several stores to add full grocery departments, Reuters reports.
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Bentonville, AR-based Walmart Stores operates retail and other stores in various formats, including membership clubs. The company operates through three business segments which consists of Walmart U.S., Walmart International and Sam's Club.
Separately, 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, solid stock price performance, good cash flow from operations, growth in earnings per share and notable return on equity. 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 1.0%. 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.
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. 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.
- 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 54.45%.
- 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).
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Food & Staples Retailing industry and the overall market, WAL-MART STORES INC's return on equity exceeds that of both the industry average and the S&P 500.
- You can view the full analysis from the report here: WMT Ratings Report