KeyBanc Starts Wal-Mart (WMT) at Overweight
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KeyBanc initiated coverage on Wal-Mart (NYSE: WMT) with an Overweight rating and a price target of $90. Analyst Edward Yruma thinks shares are poised to inflect positively.
"Walmart’s investments in store experience, e-commerce and eventually price are helping drive sustainable market share gains, and we think earnings are poised to inflect positively. The Company has posted positive comps for eight consecutive quarters, which validates recent investments. We think that the Company can opportunistically use price investments as a lever to drive the targeted incremental $45B-$60B in sales over a three-year period," said Yruma.
The analyst added, "We believe that Walmart can return to both revenue and EBITDA growth consistently in 2017 after six consecutive quarters of EBIT compression. The Company will begin to cycle its labor investment and we think that comps are poised to accelerate. Our proprietary Key First Look dataset points to continued traffic strength, which is particularly important given that traffic has been roughly 70% of the comp increase over the past eight quarters."
Shares of Wal-Mart closed at $71.79 yesterday.
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