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Wal-Mart Shares Could Grind Higher If This Happens

Wal-Mart Shares Could Grind Higher If This Happens - Wal-Mart Stores, Inc. NYSE:WMT

Baird has maintained its Outperform rating and $80 target price on Wal-Mart Stores, Inc. WMT 1.67% as it is encouraged by early signs of progress, thus adding to the defensive appeal of shares amid the tough retail environment.

"[I]nvestments in employees/wages, customer service, merchandising, and digital/omni-channel capabilities appear to be striking a tone with consumers. While absolute valuation metrics appear stretched, relative reads are more in line with historical trends, so we believe shares can grind higher if these positive trends continue," analyst Peter Benedict wrote in a note.

The retail giant's quarterly adjusted EPS of $1.07 beat expectations of $1.02 on stronger U.S. comps and a lower tax rate. Comps of +1.6 percent exceeded 1 percent plan, with traffic (+1.2 percent) the key driver.

Looking ahead, third quarter comps are seen growing 1–1.5 percent, a solid outlook given the struggles across many parts of retail. Further, the acquisition of is expected to add additional upside.

The company also raised its FY16 EPS guidance to $4.15–$4.35 (vs. prior $4.00–$4.30). Baird's FY16/FY17 EPS view go up by $0.05 to $4.30/$4.50 to reflect better core trends partially offset by assumed operating losses at

At the time of writing, shares of Wal-Mart were down 1.64 percent at $73.08.

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Aug 2016JefferiesMaintainsBuy
Aug 2016Deutsche BankMaintainsHold
Jul 2016Northcoast ResearchDowngradesBuyNeutral

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