Wal-Mart’s Woes, Boeing’s Wows! — Friday’s IP Market Recap

by Kyle Woodley | November 18, 2011 4:43 pm

Wal-Mart’s Woes, Boeing’s Wows! — Friday’s IP Market Recap

IPMarketRecap Wal Mart's Woes, Boeing's Wows!    Friday's IP Market Recap[1]This week on Wall Street saw the world’s largest retailer continue a years-long struggle and one of the world’s biggest names in aerospace in defense rewrite the history books.

Wal-Mart Stores (NYSE:WMT[2]) watched its third-quarter profits slip to $3.34 billion[3] compared to $3.44 billion in 2010, dampening what could have been a cheerful earnings report Tuesday that included the company’s first period of increasing U.S. same-store sales in 10 quarters. The report sent WMT stock down 2.5% of the day, and Wal-Mart limped out down 3.3% on the week at $57.22.

The retailer has struggled for years despite the seeming appeal of its lauded deep discounts in a down economy — however, lower-cost companies like Dollar General (NYSE:DG[4]) and Dollar Tree (NASDAQ:DLTR[5]) have continued to cut into Wal-Mart’s market with great bargains, as has warehouse giant Costco (NASDAQ:COST[6]).

Also problematic for Wal-Mart on the other side of the price line is more trendy retailer Target (NYSE:TGT[7]). The country’s No. 2 retailer took the spotlight from WMT with its third-quarter earnings report, which had the company beating analyst estimates with profits of $555 million, up from $535 million a year ago. Target got a momentary boost on the news but finished the week flat at around $53.

Target recently has gone on the aggressive, teaming up with credit card company American Express (NYSE:AXP[8]) in offering prepaid debit cards[9] — a direct answer to the Green Dot-powered Visa (NYSE:V[10]) and MasterCard (NYSE:MA[11]) cards that can be found in Walmart stores.

Still, Wal-Mart remains the stronger competitor[12], with its prices offering consumers much more protection against  continued economic weakness than Target, which can’t out-price Wal-Mart and instead tries to pull customers in with exclusive homewares and clothing lines. And despite Wal-Mart’s seemingly endless reach, the company still has room to stretch its legs — as evidenced by its newest metro push, into Washington, D.C[13].

Boeing’s Banner Week

Boeing (NYSE:BA[14]) had plenty of reason to celebrate Monday — after all, at the Dubai Air Show the day before, it had announced a deal with Emirates airline for 50 of the company’s 777-300 jets at a price tag of $18 billion. The contract marked the largest in Boeing history.

But history apparently isn’t what it used to be.

Three days later, Boeing set a new company mark by scoring a $21.7 billion order[15] from Indonesia’s Lion Air for 230 of its 737 jets. President Barack Obama attended a signing order for the ceremony, and the White House touted the deal, saying it would support more than 110,000 U.S. jobs.

Boeing gained about 1% for the week and is up almost 15% in the past three months. Still, any business in the sky is far from secure right now — as evidenced by American Airlines parent AMR Corp.’s (NYSE:AMR[16]) flirtation with its all-time low[17] — and investors should weigh a number of factors when considering whether to hold Boeing[18].

Apple Leadership

This week, Apple (NASDAQ:AAPL[19]) added Disney (NYSE:DIS[20]) CEO Bob Iger to its board of directors, replacing the iconic Steve Jobs. The match makes sense[21] considering the relationship between the two companies, actually bridged by Jobs when Disney acquired Pixar in 2006.

Not to mention, the head of Disney will fit right in with the rest of the Apple brain trust[22], which includes executives from several top companies, as well as former Vice President Al Gore. No doubt troubled specialty retailer J.C. Penney (NYSE:JCP[23]) — now under the leadership of former Apple retail chief Ron Johnson[24] — hopes there’s no brain drain once you leave Cupertino, Calif.

Three Up Friday

Three Down Friday

As of this writing, Kyle Woodley did not hold a position in any of the aforementioned stocks. Check out our list of previous IP Market Recaps[31].

Endnotes:
  1. [Image]: http://investorplace.com/hot-topics/investorplace-market-recap/
  2. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  3. slip to $3.34 billion: http://investorplace.com/2011/11/wal-mart-earnings-disappoint-again-wmt/
  4. DG: http://studio-5.financialcontent.com/investplace/quote?Symbol=DG
  5. DLTR: http://studio-5.financialcontent.com/investplace/quote?Symbol=DLTR
  6. COST: http://studio-5.financialcontent.com/investplace/quote?Symbol=COST
  7. TGT: http://studio-5.financialcontent.com/investplace/quote?Symbol=TGT
  8. AXP: http://studio-5.financialcontent.com/investplace/quote?Symbol=AXP
  9. offering prepaid debit cards: http://investorplace.com/2011/11/american-express-target-prepaid-card-axp-tgt/
  10. V: http://studio-5.financialcontent.com/investplace/quote?Symbol=V
  11. MA: http://studio-5.financialcontent.com/investplace/quote?Symbol=MA
  12. stronger competitor: http://investorplace.com/2011/11/wal-mart-target-retail-battle/
  13. into Washington, D.C: http://investorplace.com/2011/11/wal-mart-walmart-wmt-washington-dc-jobs/
  14. BA: http://studio-5.financialcontent.com/investplace/quote?Symbol=BA
  15. by scoring a $21.7 billion order: http://investorplace.com/2011/11/boeing-deal-indonesia-lion-air-obama-market-summary/
  16. AMR: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMR
  17. flirtation with its all-time low: http://investorplace.com/2011/11/4-ways-for-amr-corp-to-pull-out-of-its-tailspin/
  18. considering whether to hold Boeing: http://investorplace.com/2011/11/boeing-big-777-sale-ba-stock/
  19. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  20. DIS: http://studio-5.financialcontent.com/investplace/quote?Symbol=DIS
  21. The match makes sense: http://investorplace.com/2011/11/disney-ceo-will-take-steve-jobs-place-in-apple-boardroom/
  22. rest of the Apple brain trust: http://investorplace.com/2011/11/jc-penney-ceo-ronald-johnson-jcp-apple-aapl/
  23. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  24. former Apple retail chief Ron Johnson: http://investorplace.com/2011/11/jc-penney-ceo-ronald-johnson-jcp-apple-aapl/
  25. CME: http://studio-5.financialcontent.com/investplace/quote?Symbol=CME
  26. MOS: http://studio-5.financialcontent.com/investplace/quote?Symbol=MOS
  27. CCL: http://studio-5.financialcontent.com/investplace/quote?Symbol=CCL
  28. CRM: http://studio-5.financialcontent.com/investplace/quote?Symbol=CRM
  29. ARMH: http://studio-5.financialcontent.com/investplace/quote?Symbol=ARMH
  30. VMW: http://studio-5.financialcontent.com/investplace/quote?Symbol=VMW
  31. IP Market Recaps: http://investorplace.com/hot-topics/investorplace-market-recap/

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