Martha Stewart And Wal-Mart

Martha Cozies Up to Wal-Mart
Is Martha Stewart beginning a long friendship with Wal-Mart Stores (WMT)? On July 8, Martha Stewart Living Omnimedia (MSO) announced a pact with the discounter to sell craft products such as stationery supplies, jewelry-making kits, and wedding items like ring pillows. The buzz is that this will lead to a broader agreement, which analysts call a big plus for Omnimedia. Chairman Charles Koppelman says the deal will help replace the $1.5 billion in sales it got with its Kmart (SHLD) tie-in, which will expire in 2010.
"Our research suggests incremental yearly earnings before taxes and interest of at least $1.5 million," says Richard Ingrassia of Roth Capital Partners. He rates the stock, now at 7.49 a share, a buy, with a 12-month target of 18. David Kestenbaum of investment firm Morgan Joseph says the Wal-Mart link, small for now, "could lead to something bigger."
—By Gene Marcial BusinessWeek