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Is Wal-Mart Winning the Black Friday Battle but Losing the War?

Much has been made of the blocking and tackling Wal-Mart Stores is doing to woo customers this holiday season.

Walmart
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Walmart

The discounter has one of the earliest start times forBlack Friday, with its doors opening at 10 p.m. on Thanksgiving Day. And as Walmart executives discussed during a recent conference call, it has seen a strong response to itslayaway program, which appeals to consumers who can't or don't want to use credit cards to buy their holiday gifts. Walmart also is pledging to guarantee it has the lowest prices on certain items.

All of these steps are giving the retailer some momentum heading into the holiday season, according to Christopher Horvers, a retail industry analyst at JP Morgan.

Horvers upgraded Wal-Mart shares Monday to "overweight" and set a price target on the stock of $64.00.

"Momentum begets momentum," Horvers said, in a research note. He expects Wal-mart can "recapture some of the market share it lost when it strayed from its core brand message of price and assortment leadership."

While Horvers expects Wal-Mart's aggressive holiday promotions and increased advertising will help drive traffic, there are some who are concerned the retailer may be taking this a bit too far. Goldman Sachs said it expects Wal-Mart to be a Black Friday sales winner, but the victory will come at a cost.

As always, the trick for retailers when deals drive traffic is to make sure it doesn't completely destroy profit margins.

We'll see how Wal-Mart does over the holiday season.

But Horvers' upgrade also hinges on other factors. JP Morgan's outlook calls for consumer spending to slow down after the holiday season.

The analyst argues Wal-Mart shares do best in "times of stress."

"With the consumer wallet stretched due to slower wage growth and the ongoing propensity for (consumers) not to shop outside of events (such as holidays and back-to-school season), we think WMT can outperform into the new year," he said.

And it's this outlook regarding consumer spending that plays a big factor in Horvers' call.

Questions? Comments? Email us at consumernation@cnbc.com. Follow Christina Cheddar Berk on Twitter @ccheddarberk.