Although Deborah Weinswig, a retail analyst at Citi, characterized last quarter as a “perfect environment for spending” due to warm weather, many retailers spent heavily on technology, which impacted their bottom line. This led to disappointment among analysts.
Weinswig has a “buy” rating on the shares, with a $78 price target.
She forecast that Wal-Mart would post better second-quarter earnings as it concentrates more on hard-line items, sporting goods, and apparel.
“We’ve seen improvement in both traffic and ticket, but I think what we’ll start to see in the second quarter is really margins play out for them, and they’ve had this big focus on investing back in price and so I think we’ll see the second quarter will really be an inflection point for them and should play out in the stock price, and it’s the reason we raised our price target to $78,” she said on “Squawk on the Street.”
—BY CNBC.com’s Katie Little
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UBS Securities makes a market in the securities and/or ADRs of Wal-Mart Stores. Citi has an investment banking relationship with the company.
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