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Buy, Sell or Hold Wal-Mart?

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  • Description

    Jefferies analyst Daniel Binder previews Wal-Mart's earnings.

  • Duration 3:45
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-- -- so much.

-- -- charged JT -- of their biggest competitors Wal-Mart.

What -- Mexican bribery investigation is now the time to take advantage.

Or is it too risky to buy the stock on the debt.

No bidders an analyst with Jefferies are pleased to have -- trying to -- -- a preview of their earnings again welcome.

Thanks Wal-Mart buy sell -- hold the head of the earnings.

-- we have hole graded.

With that said we actually think that the -- quarter should look pretty good as they benefit from.

An action date from the leap year.

As well as whether benefits -- pulled demand forward I believe in Q1.

And lastly the addition of a broader assortment as they that it skews back over the last year.

But boy that Mexican bribery scandal casting a shadow over Wal-Mart when do you expect that this inside.

I think is gonna take some time.

The company is not really giving us -- timeline on this right now there's an internal investigation going on.

Globally -- not just in Mexico we don't know what that's going to reveal.

The risk is obviously they have more headline negative headline risk.

Lawsuits from shareholders.

Okay.

Other other other revelations that we hard to speculate on today but you know.

Interesting to me -- I was reading in the regular or -- Released today Berkshire Hathaway.

But increase actually seeking in Wal-Mart and then found out about this bribery investigation.

And then Warren Buffett of course when asked feather sticking with the position says is that bring any more confidence in your view.

To the shared faith.

You know there's this is a bid and ask on this every day obviously those that believe they can.

Profit from the depths gonna get involved -- never is a different point of view I think.

With this kind of news you run the risk additional.

Bad news following.

You know we've already heard.

Another thing he said triggered a follow up question about whether or not these allegations are centered just in Mexico do you think do you have any evidence that.

It's beyond back that it could have happened in other regions.

Yes so Wal-Mart operates and a lot of -- -- markets like China and Brazil.

Wal-Mart did not come out at the time of this these allegations and say that it was exclusive.

To Mexico and the reason they did -- because they are they've watched -- internal investigation that's worldwide so.

I certainly don't have any evidence to suggest that they had bad practices in other parts of the world.

Obviously they wanna be able to I'd say that definitively.

They can't say that yet today and so we have few.

We have to wait for that to to -- -- -- out.

Yeah understood understand why investors are still skeptical look back to the good news -- looking at a third straight quarter sales growth.

We know -- expanding globally what else is driving -- Well.

You know ironically.

We've turned positive comps -- sales a couple of months ago couple quarters ago.

And -- each of the last two quarters it missed consensus expectations.

You know this contrasts against the prior nine quarters when comps were negative and they were beating expectations I think investors are little frustrated.

With that said I think her Q1 they probably can beat the mentioned -- -- have an extra day in the quarter.

He has some warm weather that help it -- excuse and then lastly we have some food inflation that I think will probably win over the course of the year what should help -- this quarter.

In terms of growth elsewhere albeit a small part of the business -- has been coughing well -- -- -- we expect up about 5%.

International has been tough.

Depending on the forty look at it's a fairly mediocre to disappointing growth.

And so you're you're really looking sort of a slow growth and it is -- this size you know most single digit growth is pretty much.

What I think is in store for them organically.

OK Dan we covered a lot of territory thanks like gangster covering Wal-Mart -- without a hold rating on the stock just remind --

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