Wal-Mart Gains As Economy Falters

When the economy falters, people don't stop spending money, but they might be more likely to spend it at Wal-Mart Inc.

In a note to clients, analyst Deborah Weinswig of Citigroup Global Markets wrote:

We believe Wal-Mart's (WMT) U.S. business is regaining momentum, particularly in the current economic environment, driven by the company's strong value proposition, improved merchandising and better in-store execution.

She rates the shares a buy with a target price of $67, basing that figure on a multiple of 17 times estimated 2009 diluted per share earnings of $4.05. This compares to a 14 times projected earnings estimate for rival Target Corp. (TGT), which has no international exposure.

Ms. Weinswig says international operations are becoming a greater driver of overall earnings at Wal-Mart, contributing to 37% of earnings before taxes and interest in 2007 compared with 22% in 2003.

Comments

[deaverb]

Real story is international. 23% to 37% in
4 years suggests a trend toward 51% in
another 4. Then the anti-walmarters will
have even less clout. Walmart could follow
McDonalds formula worldwide. Awesome.

[Roudy]

I agree that Wal-Mart is the place to be in the next few months or years. I've owned it since 1981 and never did let the Wall Street bunch get me down enough to sell. I shall continue to hold and buy more. These are the same people that were negative on the IPO Mastercard which I also bought at $49 per share. Remember I am just a poor, humble, country boy without a degree.RoudMan