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 jet.com 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.”