Walmart shares close higher on Monday, US retailer to discontinue sales of e-cigarettes

In an internal memo, cited by CNBC, Walmart announced that it would discontinue sales of e-cigarettes in its Walmart and Sam’s Club locations across the United States, as it pointed out “regulatory complexity” and “uncertainty” surrounding this particular industry.

The decision also comes at a time when the Trump administration has been preparing a federal ban on flavored e-cigarettes.

Walmart shares closed higher for the fifth time in the past ten trading sessions in New York on Monday. The stock went up 0.55% ($0.64) to $117.62, after touching an intraday high at $118.41 and also a fresh all-time high.

Shares of Walmart Inc have risen 26.27% so far in 2019 compared with a 19.34% gain for the benchmark index, S&P 500 (SPX).

In 2018, Walmart’s stock went down 5.67%, thus, it again outperformed the S&P 500, which registered a 6.24% loss.

The entire industry has faced significant turbulence, since teen vaping rates in the United States reach record highs and federal health officials warn about an outbreak of a mysterious vaping-associated lung disease that has affected about 530 people.

“Given the growing federal, state and local regulatory complexity and uncertainty regarding e-cigarettes, we plan to discontinue the sale of electronic nicotine delivery products at all Walmart and Sam’s Club U.S. locations,” Walmart said in a memo to local managers, cited by CNBC.

“We will complete our exit after selling through current inventory,” the company also said.

Earlier in 2019, the tobacco buying age was raised to 21 at Walmart, as the retailer responded to an “epidemic” of teen vaping. According to preliminary federal survey data, over 25% of high school students say they use e-cigarettes.

Analyst stock price forecast and recommendation

According to CNN Money, the 28 analysts, offering 12-month forecasts regarding Walmart Inc’s stock price, have a median target of $124.50, with a high estimate of $135.00 and a low estimate of $105.00. The median estimate represents a 5.85% upside compared to the closing price of $117.62 on September 23rd.

The same media also reported that at least 14 out of 30 surveyed investment analysts had rated Walmart Inc’s stock as “Buy”, while 10 – as “Hold”. On the other hand, 1 analyst had recommended selling the stock.