Walmart Shares Fall After Stock Downgraded To "Sell"

Walmart share price falls after Merril-Lynch downgrades stocks to “sell” from “neutral.” In a note to clients, a Merril analyst cited shrinking profit margins as a concern for the retailer. This would be the first time in 2007 the stock has been marked as sell.

Guess if you can’t import as many cheap and deadly products from China, it’s going to undermine the bottom line…

Wal-Mart falls after Merrill downgrades to ‘sell’ [Reuters]
(Photo: Walmartopia)

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  1. When a stock ever reaches “sell” it’s like a kiss of death for a while… analysts notoriously never pin a “sell” on a stock. Must be getting bad for Wallyworld.

  2. WindowSeat says:

    Looks like WalMart’s is slamming into the wall I’ve predicted for ten years. Now what group of consumers could save them, maybe well-paid workers in manufacturing? Too bad you drove all their jobs overseas.

  3. timmus says:

    Rollback those stock prices!

  4. MENDOZA!!!!! says:

    I blame Mike Vick and subprime mortgages.

  5. Youthier says:

    Cheer up, Wal-Mart! I’m sure it won’t be long until you’re a “Don’t Buy” or even a “Risky”!

  6. Craig says:

    Has anyone actually checked the stock price? It’s down 2%…big deal.

  7. mikecolione says:

    2% is alot for a stock that has pretty much stayed the same for the last few years. Going from a flat stock price to a 2% decline is huge. Especially for this company.

  8. Trai_Dep says:

    Well, sure Wal-Mart loses a bit to discerning, enlightened shoppers. But think of the FORTUNE they’ll be making off the dermatologist’s kickbacks to heal those scarred, chemically-burned feet!

    (Oh, Merril-Lynch: you’re racist (wanted to save the wingnuts the bother))

  9. Notsewfast says:

    @mikecolione:

    I don’t fully agree with Craig, but he’s correct that 2% is statistacally insignificant and could be caused by the random nature of the markets, so your criticism doesn’t really hold up. Basing a 2% change after being flat “especially for this company” doesn’t mean anything, Walmart’s stock is not impervious to market fluctuations and speculation.

    @Craig:
    the change since the announcement isn’t what’s important (especially in the shaky conditions in the last couple of weeks). What IS significant is the fact that the Stock was downgraded to “sell”. Which as PFBLUEPRINT said, very seldom happens. The true test will be to see what happens in the near future, and if analysts from other major firms (citi… I’m looking at you) downgrade it as well.

  10. homerjay says:

    SO’d ya go see Walmartopia yet, Ben? I do believe its a business expense. :)

  11. catnapped says:

    Maybe people are getting tired of their non-existant “always low prices”. More and more I’m finding that for a number of items, anywhere *else* is cheaper than Wally World (and even more so when you factor in the gasoline to drive there)

  12. CumaeanSibyl says:

    Is there a place where you can look up Merrill Lynch’s recommendations on individual stocks? That’d be a great tool, if I could find it.

  13. killavanilla says:

    @WindowSeat:
    It only took 10 years for your prediction of doom!
    Sweet.
    Is it coming true, or is this just a hiccup.
    Time will tell…

  14. s35flyer says:

    2% down, BFD, checked your portfolio lately? If its only down 2% your doing great!

  15. catnapped says:

    @s35flyer: Like the others have stated, down = disaster where Smiley Mart is concerned (where their business model is anything under projection is considered a loss)

  16. Craig says:

    @Secret Agent Man: I agree with you regarding what’s important, but the title of this article begins with “Walmart Shares Fall,” which is what I was commenting on.

  17. Fl3shy says:

    I haven’t shopped there for years, and I will continue to not support them. Poor quality, degrading aesthetics (as a designer I find the stores to be what we would call “design vomit” lol), and general incompetence are among my top reasons.

    The bigger they are the harder they fall.

  18. WindowSeat says:

    @killavanilla: Ten years is a reasonable length of time to predict their eventual downfall, their business model was/is unsustainable.

  19. mantari says:

    PFBLUEPRINT nailed it. They don’t mark stocks as a sell very often. I can’t remember how far it was into the Worldcom fiasco before one of them finally rated the stock as a sell.

    To me, it means, “All of our big clients have gotten out of the stock, and we don’t have a relationship with the company, so we’re free to admit now that this is a big turd.”

  20. humphrmi says:

    The reason their stock isn’t taking much of a hit is because a single downgrade isn’t enough to move the market, even in a single issue. Fund managers don’t buy or sell on analyst ratings, all a Merrill downgrade means is that “we’re going to tell OUR customers who ask us that they should do this…” Add to that, most customers don’t follow their broker’s analyst’s advice, and you’ve got pretty much a non-event here. Also, it was a one-step down grade for Walmart – not like Merrill moved them from a “Buy” to “Sell” – most market makers who give a rats a$$ about the analysts will have already factored in that Merrill wasn’t too long on Walmart to begin with.

  21. Trai_Dep says:

    Read Emperor’s New Clothes? Just takes the first kid to yell, “He’s NAKKID”* to get the snowball rolling. Many people think that Wal-Mart’s rapacious model isn’t sustainable, as well as being destructive across so many spheres. Having a Wall Street analyst admit it in print is a big deal.

    * Or, if the Emperor’s a Republican, “He’s NAKKID and he tried BUGGERING me!”

  22. LeopardSeal says:

    Let me be the first to say “Ha Ha”. We can only hope that this is the first nail in Wal-Mart’s coffin.

  23. floofy says:

    Damn! Is anyone else getting sick of reading multiple Wal Mart posts every day?

  24. Keegan99 says:

    Indeed. The editors here don’t even attempt to be objective in their treatment of Wal-Mart – a large corporation that has both positive benefits to consumers (low prices, stemming inflation, etc.) and negative (nazi shirts, questionable sandals, etc.)

    They seem to take a perverse joy in publishing any negative Wal-Mart news, even when it’s not really consumer related, as is this tidbit and overzealous, gleeful headline. Seriously, a 2% hit? Wow. That certainly deserves a whole story.

    Lose the hate for WMT and get back to what made this blog good: a focus on customer service issues and consumer advocacy.

  25. Trai_Dep says:

    Isn’t that like slamming folks for blaming Satan once their child starts puking pea soup, hurling furniture telekenetically then pleasuring herself using religious relics? Who should they blame – Campbell’s Soup?

  26. markwm says:

    @WindowSeat:
    It’s not really that reasonable. Given a long enough time-frame, _every_ business will fail. None are infinitely sustainable.
    More than likely, this is a bad case of indigestion but everyone’s looking for a heart attack.

  27. Chairman-Meow says:

    What i’m curious about is how much Astroturfing actually goes on here.

    Is what said on consumerist have that much impact ?

  28. killavanilla says:

    Yeah, gloom and doom-ers..
    The stock price is up.
    That’s right. Up.
    Another case of “I told you so” and “I knew it” being meaningless and untrue.
    Yeah, no loss.

  29. revmatty says:

    Ah, that’s better. There’s the totally irrelevant and gratuitous China-bashing I’ve come to expect from Consumerist.

  30. Allroads says:

    What is going to be interesting is how WalMart performs during the Christmas season. The jury is still out, but my guess is that if another major recall is announced in a key category, then there might be a good market on the sell side.

    and given the majority of Xmas shipments are already sailing, there is little they can do within the factories before the holiday season kicks off

    R
    http://www.allroadsleadtochina.com