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The last traded price of the stock of Wal-Mart Stores Inc. is $53.19 on 29th August, 2011. The price of the stock at the same point last year was $50.55. The price has shown an increase of 5.22% in the past one year…

Introduction

If we compare the price movement of the stock with that of the S&P 500, NASDAQ and Dow Jones Industrial Average, we see a positive correlation between the stock price and the three indices. The stock prices have moved with the market in the past one year. But on the other hand, the stock price movements have been less vigorous than the three indices, which mean that the stock is not as volatile as the market. In absolute terms the sales and profitability of the firm has increased in the past 3 years. The sales have grown at a rate of 2.15% in the past three years. The profitability of the firm has grown at a rate of 10.67% in the past three years. The profit margin has also seen an increase in the past three years. It was 3.31% in 2009, 3.52% in 2010 and 3.89% in 2011. The trailing profit margin is also following this trend with a margin of 3.87% for the quarter ending July 31, 2011. According to upgrades and downgrades history, the stock was downgraded on February 10, 2011 to neutral from buy. But analysts after that have estimated a mean price target of $60.10, which is approximately $7 above the current price. Analysts’ estimates show that the sales will show a growth at the end of this year and the next one. The analysts also expect that the EPS will also show a growth. The analysts have estimated the Wal-Mart will grow at 10.41% per annum over the next five years and the industry will grow at 14.82% per annum. The analysts recommend buying to holding on to the stock with a mean recommendation of 2.2. ...
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