Massmart Stock drops after downgrade

Massmart Holdings, controlled by Walmart, fell for the first time in nine trading days after Deutsche Bank cut its recommendation on the stock to sell from hold. Massmart closed 2.16 percent lower at R178.76 on Friday and Deutsche Bank’s 12-month price estimate was R140. While Massmart might benefit from “potential synergies from a Walmart tie-up”, Deutsche Bank had concerns about near-term earnings from “potentially aggressive discounting to pursue market share” and “the potential drag on earnings from a significant investment in supply chain and organic growth”, analyst Nick Higham said. The downgrade means only two of 14 monitored analysts do not have a sell recommendation on Massmart. – Bloomberg Source