There could not be a better study in contrasts. On the one hand Wal-Mart, finding favor with a key analyst,  as sales increase preparatory to an important shopping season. On the other, Best Buy Co., Inc. (NYSE:BBY), a floundering consumer electronics chain with governance issues, on the threshold of being taken private by its founder, provided the board plays ball.

Walmart and Best buy logo

The key reasons David Schick recommends Wal-Mart Stores, Inc. (NYSE:WMT), upgrading it to Buy from Hold, are as follows.

Shoppers are increasingly showing up – particularly once-a-week shoppers, and also those who had ceased to shop at Wal-Mart Stores, Inc. (NYSE:WMT).

Secondly, revenues at stores open at least a year, a common retail metric, has risen 2.6 percent over the first quarter, the third such rise on the trot. On the whole, customer traffic rose for the second consecutive quarter. More indications that things might be changing – the clothing business showed a positive sales growth after six long years.

The retailer has refocused its product line geared to attract the lower-income shoppers, and done away with previous mistakes in pricing and selection of merchandise. Lower gas prices may have also contributed to better purchasing power for this category of shoppers.

Given these positives, Schick expects the stock to reach a price target of $83 within a year, from around current levels of $73. Second quarter income is expected at $1.20 a share, up from $1.17 a share, and a full year EPS of $5.09 a share, compared to $4.97 earlier.

On the other hand, the outlook for Best Buy looks clouded, considering the strides made by Amazon.com, Inc. (NASDAQ:AMZN) in online retailing, and offering a better choice and convenience. Considering Amazon’s recent plans for expanding its retailing reach by creating physical infrastructure in most states, brick-and-mortar retailers may be in for stiffer competition. This may make it unsuitable for Wal-Mart Stores, Inc. (NYSE:WMT) to consider Best Buy Co., Inc. (NYSE:BBY) as a worthwhile takeover target, and it may not interfere in Founder Schulze’s plans to privatize Best Buy Co., Inc. (NYSE:BBY), though the price he has offered is clearly not palatable to the company board.