Walmart stock gains after MKM analyst says buy, saying a more price discerning consumer should be a boon

Shares of Walmart Inc. WMT, +0.86% rose 0.7% in premarket trading Friday, after the discount retail giant got a bullish boost from MKM Partners analyst Bill Kirk, who said the company is "doing the most, but getting the least credit." He raised his rating to buy and lifted his stock price target to $166 from $156. Kirk said Walmart has better inventory levels heading into the holidays, trends are accelerating while others are stagnating and is "best positioned" if the consumer becomes more price discerning given food and energy inflation. The stock had slumped 2.6% over the past three days, since Walmart reported fiscal third-quarter earnings that beat expectations, amid concerns over gross margin pressures. MKM's Kirk isn't so concerned, saying Walmart is diversifying away from food pressure, but is still gaining share against grocery peers. "Commentary on widening price gaps and not fully passing on inflation should concern other grocers but will be a boon to Walmart, particularly if the consumer becomes more value-conscious," Kirk wrote in a note to clients. Walmart's stock has slipped 4.6% over the past three months through Friday, while the Dow Jones Industrial Average DJIA, -0.17% has gained 2.8%.