Wal-Mart to do well in election year slowdown: Stifel
(Reuters) - Stifel Nicolaus upgraded Wal-Mart Stores Inc (WMT.N) to "buy," saying the retailer is likely to remain resilient during a possible slowdown in consumer spending this year.
The brokerage said it expects the U.S. election and the late 2012 'fiscal cliff' debate to hit consumer sentiment, referring to the expiration of lower tax rates on December 31 and the automatic federal spending cuts that kick in early January, unless Congress steps in.
Stifel also expects the recent rise in corn prices to drive up inflation.
"This stagflation scenario, in our view, is the kind of environment in which Wal-Mart thrives," analysts at Stifel wrote in a client note.
Wal-Mart, with its low pricing, would be able to continue to do well like it did in 2008, the brokerage said, pulling shoppers to its more than 10,000 outlets.
As consumers faced high gas prices, food inflation and a shaky housing market in 2008, the retailer benefited from U.S. shoppers looking for cheap groceries.
Wal-Mart in May reported profit and sales that surpassed analysts' expectations as more people shopped at its established U.S. stores and spent more.
Shares of the company were flat at $74.56 on Monday morning on the New York Stock Exchange.
(Reporting by Arpita Mukherjee in Bangalore; Editing by Sreejiraj Eluvangal)