A study of analyst recommendations at the major brokerages shows that Wal-Mart Stores, Inc. (NYSE:WMT) is the 29th broker pick, on average, out of the 30 stocks making up the Dow Jones Industrial Average, according to ETF Channel.
Within the broader S&P 500, when components were ranked in terms of analyst favorites, WMT claims the 438th spot.
In forming this rank, the analyst opinions from the major brokerage houses were tallied and averaged. Then, the underlying components were ranked according to those averages.
Investors often interpret analyst opinions from different angles — when a company has a low rank among analysts, it isn’t necessarily the case that investors should conclude that the stock will perform poorly. It can, of course, but a bullish investor could also take the contrarian angle and read into the data that there is lots of room for upside because the stock is so out of favor.
From the other direction, a popular analyst pick could mean that many sharp minds individually came to the same bullish conclusion. Therefore, the stock should do well, but it could also mean that if the company stumbles, that would come as a negative surprise.
For these reasons, we at ETF Channel find value to putting together these rankings because both the top and the bottom ends of the list can often make for some interesting stock picking ideas for further research.
Below is a chart of WMT stock’s rank over time:
According to the ETF Finder at ETF Channel, WMT makes up 9.2% of the Market Vectors Retail ETF (NYSEARCA:RTH), which was trading higher by about 0.2% on the day Thursday.
WMT operates in the department stores sector, among companies like Costco Wholesale Corporation (NASDAQ:COST) and Target Corporation (NYSE:TGT) trading. Below is a three-month price history chart comparing the stock performance of WMT versus COST and TGT.