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Shares of Wal-Mart Stores Inc (WMT - Analyst Report) reached a 52-week high of $78.46 on Apr 9 and eventually closed at $78.12. We note that the share price has been rising consistently since Walmart reported solid fourth quarter fiscal 2013 results in late February this year.
Year-to-date, the company’s share prices have recorded a healthy return of 13.5%. The company’s long-term estimated EPS growth rate is 9.59%. Average volume of shares traded over the last three months came in at approximately 7,106K.
Market Leading Position and Solid Fourth Quarter Results
Walmart’s dominant position among the nation’s largest grocery retailers enables it to sustain growth in its top and bottom lines, expand its store base and boost market share. Walmart’s price leadership, operational improvements, excellent merchandise quality and customer service continues to boost traffic at its stores. In addition, the company has a strong international presence and an expanding e-commerce business. It also boasts solid inventory management, prudent expense control measures, strong free cash flow, healthy balance sheet and a sizable share buyback plan.
These measures helped the company post stronger-than-anticipated fourth-quarter fiscal 2013 results. In the fourth quarter, the company’s revenues climbed 3.9% to $127.9 billion, driven by strong comparable store sales. Earnings of $1.67 a share beat the Zacks Consensus Estimate by 6.4% and surged 10.6% from the prior-year quarter on the back of top-line growth, cost savings and a lower-than-expected effective tax rate in the quarter. In fact, in the last 4 quarters, the company has outpaced the Zacks Consensus Estimate by an average of 3.24%.
The company’s productivity initiatives led to improvement in Walmart’s operating income. The company reduced operating expenses by 14 basis points in fiscal 2013. Further, it expects to reduce operating expenses by at least 100 basis points as per its five year productivity initiative program which started in fiscal 2013.
Other Stocks to Consider
Walmart holds a Zacks Rank #3 (Hold). Other stocks in the retail industry that are worth considering are Companhia Brasileira de Distribuicao (CBD - Analyst Report), Safeway Inc (SWY - Analyst Report) and The Kroger Co. (KR - Analyst Report). While CBD and Safeway hold a Zacks Rank #1 (Strong Buy), Kroger carries a Zacks Rank #2 (Buy).