Wal-Mart's New CEO Gets a Vote of Confidence

NEW YORK (TheStreet) - Wal-Mart's (WMT) new CEO Doug McMillon, set to step into his new role on Feb. 1, got a vote of confidence on Wednesday before he even starts.

Credit Suisse analyst Michael Exstein upgraded the stock to "outperform" from "neutral," and jacked up his 12-month price target by $7 to $87. Exstein believes McMillon, 47, could be the missing link Wal-Mart needs to once again return to industry leader.

"We believe McMillon has a long runway ahead of him, which positions him to take measures to alter WMT's long-term strategies, rather than focusing on repairing short-term issues," Exstein wrote in a note to investors. "In turn, we think he will be instrumental in developing a deliberately sustainable strategy with consistent execution over time. This will benefit WMT in particular given that retail investors have more recently transitioned their focus from an event-driven mindset to companies with sustainable strategies."

Shares were rising 0.13% to $74.77 on Wednesday.

Wal-Mart announced in November McMillon would succeed current CEO Mike Duke following his retirement. McMillon is currently the head of its international business, which at the time was thought to send a clear signal about the global retailer's growth plans.

However in the U.S., Wal-Mart has been losing ground over the past few years as the face of retail quickly changes and becomes more competitive. It also has been dealing with company-wide issues "related to the merchandising, technological and operational aspects of its business. As Mike Duke successfully tackled these issues during his tenure, Doug McMillon is now in a position to make more strategic changes," Exstein penned in the note.

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