Walmart Once Again Positioned To Take Market Share, Analyst Initiates At Outperform

Wal-Mart Stores Inc (NYSE: WMT) isn't going to fall victim to Amazon.com, Inc. (NASDAQ: AMZN)'s growing dominance, at least according to analysts at Oppenheimer who initiate coverage of Wal-Mart's stock with an Outperform rating and $90 price target. In fact, according to the firm's Rupesh Parikh, the world's biggest retailer is "fresher than it's been in years."

Walmart is in the early stages of developing what could prove to be a "model" omni-channel structure, the analyst explained. For instance, the acquisition of Jet.com is just one of many "meaningful step forward" to solidify its status a "proven industry innovator" with many "unique capabilities." So far, there are early encouraging signs of growth in the online channel as gross merchandise volume accelerated to 69 percent on a year-over-year basis.

Meanwhile, Walmart isn't neglecting its physical stores and has many initiatives ahead to spur growth, including:

1. Online grocery shopping and collect in store.
2. Two-day shipping with a $35 minimum from stores.
3. Home delivery experiments.
4. Also, improving food inflation trends could help boost top-line growth.

Finally, the entrance of the Germany-based budget grocery chain Lidl to the U.S. market shouldn't cause investors to worry. Walmart was able to respond very aggressively to sustain its market position through pricing and merchandising fronts.

"In our view, WMT, more than many other leading chains, now recognizes an opportunity to leverage the key attributes that fuel its dominance in physical retail, in the digital world and increasingly go 'toe to toe' with eCommerce leaders such as amazon.com," the analyst wrote.

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