Wal-Mart (WMT) Halves Apple (AAPL) iPhone 5c to $45

Tickers in this article: AAPL WMT
NEW YORK ( TheStreet) -- Wal-Mart  has undercut Apple's  pricing model selling its iPhone5c for $45, a more than 50% in savings on the original $99 price. Apple has yet to comment on the aggressive pricing strategy though TheStreet's Rocco Pendola doubts CEO Tim Cook is unaware of the issue.

Best Buy  wrapped up a weekend sale which priced the iPhone 5c at $50. Wal-Mart, however, plans to sell the model at below-price throughout the holiday season.

Jeffries' analyst Peter Misek has upgraded Apple to "buy" from "hold", raising his price target to $600 from $425. Misek believes better gross margins will support the company until the iPhone 6 launches. BMO's Keith Bachman has also raised his price target to a comparatively modest $508 from $480.

Wal-Mart shares closed 1.28% lower to $71.87, while Apple shares gained 0.98% to $487.75. The S&P 500 fell 0.85%.

TheStreet Ratings team rates Wal-Mart Stores Inc as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate Wal-Mart Stores Inc (WMT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, good cash flow from operations, growth in earnings per share and increase in net income. We feel these strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WMT's revenue growth has slightly outpaced the industry average of 3.1%. Since the same quarter one year prior, revenues slightly increased by 2.3%.
  • Wal-Mart Stores Inc has improved earnings per share by 5.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, Wal-Mart Stores Inc increased its bottom line by earning $5.02 a share vs. $4.55 a share in the prior year. This year, the market expects an improvement in earnings ($5.20 a share vs. $5.02 a share).
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. When compared to other companies in the Food & Staples Retailing industry and the overall market, Wal-Mart Stores Inc's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • Net operating cash flow has slightly increased to $6,357 million or 3.18% when compared to the same quarter last year. In addition, Wal-Mart Stores Inc has also modestly surpassed the industry average cash flow growth rate of -2.34%.
  • The net income growth from the same quarter one year ago has exceeded that of the Food & Staples Retailing industry average, but is less than that of the S&P 500. The net income increased by 1.3% when compared to the same quarter one year prior, going from $4,016 million to $4,069 million.

TheStreet Ratings team rates Apple Inc as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation: