19.05.2014 - Wal-mart did not meet expectations

Investors were disappointed in the shares of the retailer Wal-mart. The main disappointment was the fact that during the year, the company quotes remained almost on the same level as a year ago. In addition, Wal-Mart reported earnings in the first quarter at $ 115.0 billion, which is 0.8% more than last year. Higher operating expenses and interest expense have put pressure on the profitability of the business, and the company reported a decline in net profit by 5.1% - to $ 3.58 billion.

Despite this, the company has developed strong electronic commerce segment, which grew by 27% in the last quarter, which was due to bad weather conditions. Wal-Mart has released quite disappointing forecast for the second quarter. EPS is projected at the level of 1.15 to 1.25 dollars per share, which compares with a profit per share of 1.24 dollars last year.

Despite the pessimism on the market, we recommend to buy the company's shares after a decline to a level of 73.00 dollars per share and keep a long-term positive outlook.

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