Jefferies maintains a Hold rating and $77.00 price target on Wal-Mart (NYSE: WMT) following Q&A sessions. Analyst Daniel Binders said that supercenters are stagnating and that inventory push and pull is off balance.

Binders commented on WMT, saying, "We like the narrative around improving customer experience longer-term, but shorter-term, the road could be bumpy. Continued strong performance in the Neighborhood Markets format is driving most of the comp increase in the US while supercenters remain soft. Bloated inventory has led to higher shrink, but this is now on the “urgent agenda” to fix which could lead to some gross margin upside later in the year."

Binders also added, "Neighborhood Markets put up a comp sales increase of 7.9% in the quarter. Given the number of Neighborhood Market locations and sales per store estimates, rough math suggests that these smaller formats accounted for most of the comp increase for the Walmart U.S. division. The focus now is on fixing fresh and becoming better shop keepers by addressing service issues such as store cleanliness, out of stocks and front end execution. However, subsequent steps may include additional price investment and a re-examination of the store layout."

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Shares of Wal-Mart closed at $76.43 yesterday.