Citigroup Downgrades Wal-Mart (WMT) On EFCA/Card Check Concerns

March 10, 2009 7:24 AM EDT

Citigroup downgrades Wal-Mart (NYSE: WMT) from Buy to Hold, saying concerns about the expected introduction of EFCA/card check legislation, which simplifies union formation, limits the upside for the stock.

The analyst said, "George Miller (D-CA) is expected to introduce EFCA/card check legislation into the House of Representatives as early as Tue., 3/10. The bill would greatly simplify the process of union formation, limit the ability of employers to caution employees against unionization, and impose several restrictions on the bargaining process. We are downgrading WMT to Hold (2M) from Buy (1L) as we believe the potential for multiple expansion is limited while this issue is up for vote in the House and the Senate and we suspect that WMT would be the first target for unions like the UFCW if this legislation is passed."

Citi notes that Wal-Mart is the #1 target for unions.

Citi lowered their price target on Wal-Mart from $53 to $48.

For more analyst ratings on Wal-Mart click here.

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