This is Why Barclays Says Buy Walmart

According to one firm, Walmart is a buy right now as its sales growth will outperform other retailers.

Barclays has reiterated an “overweight” rating on Walmart shares this week and has forecast that the retailer’s store investments will pay dividends.

Analyst Karen Short believes that the company’s surprising positive sales momentum is just getting beginning.

“We believe that Walmart will be able to sustain comp gains over peers going forward,” Short wrote in a note to clients Tuesday. “We believe this is a function of a stronger assortment, improved quality of fresh products, goals for stores to be ‘clean, fast, and friendly,’ wage increases [etc.]”

It was in August that Walmart reported better than expected quarterly results for the second quarter, posting its highest domestic same-store sales growth in more than 10 years.

Walmart reported an increase of 4.5 percent while analysts were waiting for 2.4%.

“Walmart has regained momentum as evidenced by 15 consecutive quarters of positive traffic growth,” Short said. “We see further room for [the retailer’s] investments to drive comps.”

The analyst has a price target at $110 on the stock.

Disclaimer: We have no position in Walmart Inc. (NYSE: WMT) and have not been compensated for this article.