Merrill Lynch cut its rating on Wal-Mart Stores Inc. to sell from neutral Thursday, highlighting concerns that margins at the world's largest retailer could be compressed "dramatically."
"Following years of weak comps, declining new door productivity and aggressive expense management, margin erosion in the core U.S. division looks set to continue, and may, in fact, accelerate in the years ahead," analyst Virginia Genereux wrote in a note to clients.
"The macroeconomic backdrop is not the center the centerpiece of our argument, but it is certainly an incremental headwind," he added.
This marks the first time in 2007 that any investment house has issued a "sell" rating for Wal-Mart, according to Thomson Financial, although there have been a few sell ratings over the years.
Source: Xinhua
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