Wal-Mart - Final Thoughts

Ticker Symbol: WMT

Final Thoughts

Wal-Mart's valuation was made more attractive after getting beat up on January 8th, but is still trading at a relatively high Price/Earnings ratio of 15.04. Benefiting from consumers switching to lower-price goods, Wal-Mart has been trading defensively over the past year, outperforming most peers in the discretionary sector. During December, Wal-Mart traded in a narrow channel, stabilizing while the broad-market searched for direction. Despite Wal-Mart's poor December sales and lowered guidance, shoppers will likely continue to turn to discount retailers as the economy slumps. At or near $50/share, Wal-Mart looks like a buy, based mostly on valuation. If the stock price reclaims $55, investors may get skittish, based on the December comparables.

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