Citi Downgrades Stock Rating on Wal-Mart, Panics Market Over Employee Free Choice

Are analysts utilizing fearmongering to demonize a Walmart unionization?

On Tuesday, Citigroup analyst Deborah Weinswig downgraded Walmart stock from a buy to a hold, reportedly because of fears that the Employee Free Choice Act (EFCA) would "make it easier for employees to unionize [and] would raise the retail giant's labor costs and hurt its competitiveness."

It was hard to view this as anything but an overt political act intended to set off panic in a fragile economic climate (and an an attempt to bulldoze Blanche Lincoln), since the bill hadn't even been introduced yet and its passage is far from assured. In fact, not much has changed since February 19th when Weinswig gave Walmart a "9.5 out of 10" rating.

They analyst cited "concern that legislation intended to make it easier for employees to unionize would raise the retail giant's labor costs and hurt its competitiveness." As Firedoglake noted, "they're downgrading the stock based on an assumption that a piece of legislation will pass that hasn't even been introduced yet."

Comments

I want my bailout money back

Also, Wal-Mart's business would wane under the Employee Free Choice Act only if their financial success is based entirely on the exploitation of their employees. If that's the case, then let them fail.

Thousands of American businesses work well with unions every day under circumstances similar to those that the Employee Free Choice Act would mandate - including UPS and AT&T. Those companies are healthy and profitable, even in today's recession. So yes, this is fear mongering.