Wal-Mart Hits New 52-Week High, But Competitors Have More Room to Run (WMT, TGT, KSS, SHLD, M, JCP)

As the possibility of a drastic U.S. economic downturn looms, consumer spending has marked a precipitous decline. Housing, financials and retail companies have all seen dramatic slowdowns in their businesses and prices in the equity markets certainly reflect this concerning environment.

Department and discount retailers, which are often viewed as a simple indicator to consumer spending levels, have seen stock prices decline, on average, by about 12% from a year-ago. One company, however, that seems to be defying gravity in this space is Wal-Mart (NYSE: WMT), which has reached a new 52-week high today.

While other retail stocks have only just started performing better (as investors jump from late-cycle stocks to early-cycle stocks, like retail), Wal-Mart has outperformed the market on a consistent basis since fear of a recession first became wide-spread. Over the last six months, some the Street's largest department store retailers have lost about a quarter of their value: Target (NYSE: TGT) stock is down about 20%, Kohl's (NYSE: KSS) is down 23%, Sears (Nasdaq: SHLD) has fallen by about 22%, Macy's (NYSE: M) is down about 24% and J.C. Penney (NYSE: JCP) stock is down more than 36%.

Over the same period, shares of Wal-Mart have climbed about 20% from around $44 to around $53, despite a drop in consumer sentiment. Today, Wal-Mart shares closed the trading session up 4.8% as the retail sector had a great day on Wall Street. Each of the companies mentioned above were up at least 4%.

The chart below highlights where Wall Street's largest discount retailers are trading at compared to their 52-week highs and lows:

Company	Open Price	52-Wk High	52-Wk Low	% Below High	% Above Low
Wal-Mart (WMT)	$50.85	$53.49	$42.09	At High	26%
Target (TGT)	$50.20	$70.75	$47.01	76%	21%
Kohl’s (KSS)	$43.02	$79.55	$37.31	76%	21%
Sears (SHLD)	$99.48	$195.18	$84.72	88%	22%
Macy’s (M)	$23.28	$46.70	$20.94	88%	19%
J.C. Penney (JCP)	$39.28	$84.70	$33.27	102%	26%

Strangely enough, Wall Street actually seems like it is being logical: Wal-Mart has some of the lowest costs, and can, in turn, charge the least for its products -- something that should certainly sound attractive to wary consumers in the face of a possible recession. Contrarily, now that retail stocks are gaining momentum (evidenced by today's sector-wide surge), Wal-Mart may seem expensive as it certainly has much more downside risk than the other department retailers which have been beaten up and have much more room to run. [BCS]

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