Rochdale Upgrades Wal-Mart (WMT) to Buy

Rochdale upgrades Wal-Mart (NYSE: WMT) from Hold to Buy, saying it is time to step up and buy. The firm lifted their price targt to $65 per share, implying 25.5% upside. The price target is 16.3x their FY11 EPS estimate.

The firm commented, "WMT is a favorable blend of defensiveness (e.g. trade-down effect of EDLP, grocery and low cost leadership), as well as cyclical upside (e.g. more discretionary general merchandise and international exposure). Further, the company has an extraordinary competitive position. As a result, we have a high level of conviction about its ability to grow market share at attractive rates of return."

The firm also highlighted the following points:

• Relative return characteristics (i.e. upside relative to retailing peers) have improved meaningful following undeperformance since November.
  
• Expect EPS growth to resume in the 2nd-half
  
• U.S. comparisons ease as we cycle the Bush '08 tax refunds
  
• Assuming exchange rates remain unchanged, the impact of foreign currency should turn from negative to positive
  
• During Q2, management re-accelerated share repurchase

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