The firm cites e-commerce competition and a market shift away from big box retailers as a reason for the downgrade.
"We have reduced our rating on Wal-Mart to Underperform. Our main concerns are Wal-Mart's size and complexity, which reduces dynamism and growth; incremental risks with e-commerce competition, particularly as Wal-Mart's large stores are less favorably positioned for a consumer who is increasingly buying individual items online; and the prospect of sector rotation away from retailers at this stage of the economic cycle" William Blair said in a research note to clients," analysts said in their note.
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, good cash flow from operations, reasonable valuation levels and notable return on equity. We feel these strengths outweigh the fact that the company shows low profit margins."
Highlights from the analysis by TheStreet Ratings Team goes as follows: