Toyota Motor Corp, Wal-Mart, Barclays, Deutsche Bank and JP Morgan

CHICAGO--([ BUSINESS WIRE ])--Zacks.com Analyst Blog features: Toyota Motor Corp. (NYSE: [ TM ]), Wal-Mart Stores Inc. (NYSE: [ WMT ]), Barclays (NYSE: [ BCS ]), Deutsche Bank (NYSE: [ DB ]) and JP Morgan (NYSE: [ JPM ]).

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Here are highlights from Thursdaya�s Analyst Blog:

Another Recall for Toyota?

Toyota Motor Corp. (NYSE: [ TM ]) is likely to announce another round of safety recalls in the wake of an engine problem with 270,000 of its cars sold worldwide. The automaker has found that the vehicles with defective engines are getting stalled while moving, while some are making strange noises.

Toyota sold about 90,000 units of these vehicles with defective engines in Japan, and the rest are overseas. They include luxury sedans such as Crown and seven models of Lexus. So far, it has received 200 complaints from its home country related to the problem.

If announced, this would be Toyotaa�s second recall in less than a week. Last week, the automaker announced recalling 17,000 units of its 2010 model year of Lexus HS 250h gasoline-electric hybrid sedans due to a problem with the fuel tanks. The company has also suspended sales of the model temporarily.

The National Highway Traffic Safety Administration (NHTSA) first noticed the defect with the Lexus HS 250h vehicles during a crash test in the U.S. It has found that the fuel tanks in the vehicles leak when struck from behind at 50 miles per hour.

Since April this year, Toyota has been recalling its Lexus GX and Lexus LS lines. In April, the automaker recalled about 10,000 vehicles of its SUV -- the 2010 Lexus GX 460 model -- after Consumer Reports magazine revealed that the car bore risks of overturning. The magazine rated the GX 460 a aDon't Buy,a which was lifted after the recall.

In May, Toyota again recalled 8,300 of its Lexus LS sedans (4,500 units of the sedan in Japan and 3,800 units in the U.S.) in order to fix a problem with their computerized steering systems. The recall included the 2010 LS 460 and LS 600h sedans. The automaker also needed to suspend sales of the sedans for three weeks due to a scarcity of parts needed to fix the steering system problem.

Toyotaa�s recall crisis started when it suspended sales of 8 models for recalling 2.3 million vehicles to correct sticking accelerator pedals on many of its models in late January this year. The automaker has since been blamed by both the government and the media for its slow response to the safety crisis of its vehicles.

Consequently, the U.S. government imposed the highest-ever fine of $16.4 million on Toyota, accusing it of a deliberate delay in recalling the vehicles by hiding its defects even though manufacturers are legally obligated to notify the U.S. safety regulators within five business days once they come to know of a safety defect.

Wal-Mart Issues Notes, Grows in Chicago

To capitalize on the U.S. debt market, Wal-Mart Stores Inc. (NYSE: [ WMT ]) plans to issue $3 billion of senior unsecured notes in three-tranche, after issuing $2 billion of bonds in March 2010. These notes represent Wal-Marta�s biggest dollar-denominated bond transaction since April 2008, when the company sold $1 billion of 5-year notes and $2 billion of 30-year bonds.

The offering consists of $750 million of notes with a coupon rate of 2.25%, maturing on July 8, 2015, $1.5 billion of notes with a coupon rate of 3.60%, maturing on July 8, 2020, and the remaining $750 million of notes with a coupon rate of 4.87%, maturing on July 8, 2040. Barclays (NYSE: [ BCS ]), Deutsche Bank (NYSE: [ DB ]) and JP Morgan (NYSE: [ JPM ]) are the investment banks managing the sale on behalf of Wal-Mart.

The 5-year debt is expected to yield 53 basis points (bps) more than similar-maturity Treasuries, the 10-year notes may yield 70 bps more than the benchmarks and 30-year bonds may pay a spread of 108 basis points.

Bentonville, Arkansas-based discounter will use the proceeds to buy back shares and fund general corporate requirement. Financial stability and high credit rating support Wal-Marta�s corporate bond issue in the midst of a sluggish economy.

Wal-Mart, the worlda�s largest retailer, announced a $15 billion share buyback program earlier in June 2010. Moreover, in March 2010, Wal-Mart had boosted its annual dividend by 11% to $1.21.

The company has benefited from its growth in Mexico, Canada and China, as sales declined at U.S. stores.

In a separate story, Wal-Marta�s efforts to expand in Chicago have become fruitful. After six-years of toil, Wal-Mart received approval from the city council to construct its second store of 145,000 square feet in the far South Side of Chicago, the third-largest city in the U.S. The second store will sell groceries and is expected to commence in the early 2012. The company got permission after it had agreed to pay starting wages of $8.75 an hour, together with a 40 to 60 cent hourly hike after the first year.

Wal-Mart's expansion in the city has been a political battle because of labor opposition since the chain opened its first store in Chicago's West Side in 2006. Wal-Mart will focus on generating jobs, sales and taxes, ensuring a healthy economic condition in Chicago.

In the longer-term, Wal-Mart is optimistic about constructing many more stores in Chicago and creating about 12,000 jobs in the city. Furthermore, the discounter has started exploring promising locations across the city to help Chicagoans save money. It also plans to move into other cities such as New York and Los Angeles.

Wal-Mart is poised for significant growth with a two-pronged strategy that will likely include pairing smaller-sized stores, similar to that of retail pharmacy outlets, and its traditional warehouse-sized supercenters, which can run up to 200,000 square feet.

Wal-Mart serves customers and members more than 200 million times per week at more than 8,400 retail units under 53 different banners in 15 countries.

Wal-Mart shares maintain a Zacks #3 Rank, which translates into a short-term Hold recommendation. Our long-term recommendation for the stock remains Neutral.

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Toyota Motor Corp, Wal-Mart, Barclays, Deutsche Bank and JP Morgan