March 10 Citigroup downgraded Wal-Mart Stores
Inc (WMT.N) to "hold" from "buy" saying the proposed card check
legislation would increase laborcosts and could be a
significant drag to earnings for the world's largest retailer.
"We believe that WMT would be the primary target if
EFCA/card check were to be passed," analyst Deborah Weinswig
wrote in a note to clients.
If theunions are successful, the company would have to
concede higher wages formore seasoned employees, increase
employee benefits significantly, and would experience
diminished workforce flexibility, the analyst said.
She cut her price target on the stock to $48 from $53.
The legislation will be introduced on Tuesday in the U.S.
Congress and if passed, it will make it easier for workers to
Known as "card check" or Employee Free Choice Act (EFCA),
the legislation would let employees form a union if a majority
of them in a workplace sign authorization cards. [nN09482486]
Wal-Mart shares closed at $47.51 Monday on the New York
(Reporting by Neha Singh in Bangalore; Editing by Gopakumar