Walmart will benefit from growing online grocery business, Deutsche Bank says in upgrade 


Nuveen Managing Director Stephanie Link agrees that Walmart’s digital investments and acquisitions (Jet and Flipkart, among others) are a step in the right direction, but she thinks Deutsche Bank’s call is “a little early” since the company still has some way to go before it can deliver bottom-line growth.

“They [Walmart] have just started to make these investments, and you’re just starting to see some results, but I think it’s going to take a long time…I think the environment is competitive and I think what Walmart is doing is right, but I don’t necessarily want to own the stock,” she said on Tuesday’s “Halftime Report.”

In the big-box retail space Link prefers Costco, which has risen more than 20% this year compared to Walmart’s 2% drop.

Virtus Investment Partners’ Joe Terranova, on the other hand, owns Walmart since he believes the stock has momentum going forward. Like Stephanie Link, he acknowledges that it will take a while for the company’s e-commerce investments to really pay off. But he thinks Walmart is well-positioned for the long-term.

Specifically, Terranova is watching the stock’s upward trend over the last three years. “I like to look at Walmart as a $55 stock in 2015 and see how it rallied coming into 2018…This is a name that over the last couple of years has accelerated off that $56 base. You’re seeing the momentum. You’re seeing the acquisition, you’re seeing the Flipkart acquisition – the $13B that they spent there. You’re buying alongside of it.” He did, however, acknowledge that investors will have to be patient with this stock, saying “it’s absolutely a slow money trade.”

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