By Carly Forster
Wal-Mart (WMT) celebrated with celebrities this weekend despite a weak first quarter.
Wal-Mart in the News
Southpoint Qualified Fund and Southpoint Qualified Offshore Fund returned 2.5% net for the first quarter, compared to the S&P 500's 6.2% return and the Russell 2000's 12.7% gain. During the first quarter, Southpoint's funds averaged 133% long and 70% short. Q1 2021 hedge fund letters, conferences and more The fund's long positions added 13% gross Read More
Wal-Mart Stores, Inc. (NYSE:WMT) held their annual shareholders meeting in Fayetteville, Arkansas on Friday, June 6 with an audience of 14,000 people. The event was hosted by celebrity Harry Connick Jr. and had performances by Pharrell Williams, Robin Thicke, Sarah McLachlan and Aloe Blacc. The retail company shared their plans of innovation for the future and gave recognition to its thousands of employees for their hard work.
The retail giant revealed their plans to grow Savings Catcher, their new price comparison service, nationwide starting this summer. Wal-Mart Stores, Inc. (NYSE:WMT)’s Saving Catcher will perform a product search when a customer buys an item to see if it is available at a lower price elsewhere. If it is, the customer will receive Wal-Mart credit in their account. New CEO Doug McMillan noted, “Technology, data, and information are opening new doors for us to lead through. Our purpose of saving people money will always be relevant, but we’ll do it in new ways.”
Despite these plans, Wal-Mart Stores, Inc. (NYSE:WMT) had a weak first quarter. The company reported revenue of $114.20 billion on May 15, missing analysts’ consensus of $116.29 billion. In fact, Last quarter was the fifth consecutive quarter of same-store-sales decline.
What Does This Mean for Wal-Mart’s Stock?
On June 5, Belus Capital CEO and analyst Brian Sozzi initiated a SELL rating for Wal-Mart Stores, Inc. (NYSE:WMT) with a price target of $71. He explained, “Wal-Mart is in the most disturbing fundamental position perhaps in its storied history… Billions of dollars poured into reducing prices for Walmart Moms and Walmart Dads in key merchandise categories during the past two years has not translated into reignited same-store sales growth at supercenters.” Sozzi has a +6.1% average return on all stocks and a 69% success rate. He has a +0.4% average return on Wal-Mart Stores, Inc. (NYSE:WMT) stock.
On the other hand, on June 3, Gilford analyst Bernard Sosnick downgraded his rating to neutral. He reasoned, “This is a dangerous time for Walmart.” Wal-Mart Stores, Inc. (NYSE:WMT) is “no longer in sole possession of advantages that made it great.” Sosnik has a -1.8% average return on all stocks and a 50% success rate.
There is no question that Wal-Mart Stores, Inc. (NYSE:WMT) is trying to move in the right direction, but analysts’ seem to disagree if is the time to add Wal-Mart stock to their portfolio.
Carly Forster writes about stock market news. She can be reached at [email protected]