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    Reconciling WalMart Analysts Choices

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    A financial analyst at a mutual fund company (i.e., a buy-side analyst) is assigned to value, say, the stock of Walmart. You look around at what famous analysts have written and you find one who says that the stock is overpriced at its current price (roughly $42/ share as of October 9, 2007). Another, not surprisingly, thinks that the stock is a strong buy, with a target price of $60.

    You know you will be asked about these views when you present your results.

    How might you go about reconciling them?

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    Solution Preview

    When performing an analysis, each person has a direction from which they start the analysis and certain criteria they expect the stock to meet. In the case of Wal Mart, this criteria can be subject to whole market, retail market, domestic economies or global economies. Therefore, the analyst would examine Wal Mart performance under their own ...

    Solution Summary

    A discussion on why two different analysts have different ideas about the quality of Wal Mart stock. What is the criteria used and why would this make a difference in the analysts' choices is discussed.