Morgan Stanley Takes a Bullish View on Walmart

(Bloomberg) -- Walmart Inc. was upgraded at Morgan Stanley for the first time in four years as the world’s largest retailer is growing sales without sacrificing margins.

“WMT is harnessing its scale,” analyst Simeon Gutman wrote in a note to clients Wednesday. “Cost control has higher priority than at any point since we have covered the stock.”

Gutman upgraded the stock to overweight from equal-weight, with a 12-month price target of $110, up from $107. Morgan Stanley had been neutral on the stock since January 2015, according to data compiled by Bloomberg. There are 15 buy ratings, 18 holds and no sells among analysts tracked by Bloomberg.

In addition to having some of the lowest procurement and operating costs in all of retail, Walmart has also been gaining market share in key categories such as apparel, grocery, and home furnishings, as well as in its e-commerce business, Gutman said.

Walmart rose 1.2 percent in early trading before the market opened. The company is slated to report fourth-quarter results on Feb. 19.

To contact the reporter on this story: Janet Freund in New York at jfreund11@bloomberg.net

To contact the editor responsible for this story: Catherine Larkin at clarkin4@bloomberg.net

©2019 Bloomberg L.P.