Jefferies Downgrades Wal-Mart (WMT) to Hold On Lower Estimates

Jefferies downgraded Wal-Mart (NYSE: WMT) from Buy to Hold with a price target of $56 (from $61).

The firm cut FY12 and FY13 EPS estimates to $4.43 and $4.71 from $4.52 and $4.95, respectively.

Jefferies' analyst said, "Recent market share data suggests continued challenges at Wal-Mart in Q2, which combined with our own checks, lead us to think there is downside risk to sales in Q2 and potentially over the balance of the year."

The firm also note that Wal-Mart could get more aggressive on pricing, which raises the risk of greater than expected gross margin erosion in future quarters. Also inflation in food and fuel could pressure sales mix and margins further.

For more ratings news on Wal-Mart click here and for the rating history of Wal-Mart click here.

Shares of Wal-Mart closed at $52.62 yesterday.

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