Valuation

The sector we are taking is Retail in USA and our selected companies are Wal-Mart Stores Inc., Target Corporation and Costco. Here we have considered the PE ratios of these companies and made its comparison with the average of the industry. Average PE ratio for Retail Industry in US is 20.047 Wal-Mart Stores Inc. For Target Corporation For Costco 13.14 12.66 25.94

These data suggests us that the PE ratio for Costco is higher than the Industry average whereas for Wal-Mart and Target Corporation it is below average. Together with these we have considered the PEG Ratio for these firms. Wal-Mart Stores Inc. Target Corporation Costco 1.21 1.03 1.85

These ratios suggest us that investing is Cost co is more risky compared to the other two firms. Also in the last 1 year the price of Costco has moved up by more the 40% where as Wal-Mart by only around 5% and Target Corporation has moved down by 10%. Hence there are very less chances that the price of shares of Costco will further move up. Also the forward PE Ratio of Costco is 21.33 which still is more than the present PE ratio·s average. Hence our recommendation is Wal-Mart Target Corporation Costco BUY BUY SELL

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