On Wednesday, Telsey Advisory Group analyst Joseph Feldman increased the price target for Walmart Inc. (NYSE: NYSE:WMT) to $115, up from the previous target of $105, while reiterating an Outperform rating on the stock. According to InvestingPro data, nine analysts have recently revised their earnings estimates upward, with price targets ranging from $58 to $120. The stock has delivered an impressive 82.7% return over the past year and is currently trading near its 52-week high.
Feldman noted that Walmart is anticipated to maintain robust business momentum and achieve profitable market share gains in the fourth quarter of 2024 and into 2025. The retail giant reportedly outshone the broader retail sector during the 2024 holiday season, bolstered by growth in grocery unit shares and improvements in non-discretionary items. With annual revenue reaching $673.8 billion and a healthy gross profit margin of 24.7%, the company’s strategic initiatives, including store remodels, e-commerce enhancements, and marketplace expansions, were also highlighted as key drivers of Walmart’s performance.
The analyst pointed out that Walmart’s success was further supported by its rollback pricing strategy and targeted promotions, which have helped the company capture a greater share of consumer spending across various income levels, including higher-income households. Despite these positive factors, consumer spending patterns marked by selectivity and the impact of unfavorable foreign exchange trends could partially counter these gains.
From a profitability perspective, Walmart is expected to benefit from the expansion of higher-margin businesses such as advertising and third-party fulfillment services. The company is also seeing reduced losses in its e-commerce operations and lower supply chain costs. These improvements, however, are expected to be somewhat balanced by the costs of promotions and ongoing investments in technology and labor. InvestingPro subscribers can access detailed profitability metrics, valuation analysis, and 18 additional ProTips in our comprehensive Pro Research Report, which transforms complex financial data into actionable intelligence for smarter investing decisions.
In summary, Feldman highlighted Walmart’s defensive product mix, emphasis on value and convenience, and strong execution as fundamental factors that should continue to drive profitable market share increases in the final quarter of 2024. The company has maintained dividend payments for 52 consecutive years, demonstrating its financial stability, though InvestingPro analysis suggests the stock is currently trading above its Fair Value.
In other recent news, Tri-Union Seafoods has voluntarily recalled certain canned tuna products due to a potential contamination risk. The affected products, sold under brand names Genova®, Van Camp’s®, H-E-B, and Trader Joe’s, have been distributed to various retail stores. The recall is a precautionary measure following a notification from the supplier about a manufacturing defect.
In the realm of financial analysis, Bernstein analysts have raised the stock price target for Walmart to $117 from $106, citing the company’s consistent growth and recent strategic move to automate same-day fulfillment. Citi analysts have also increased their price target for Walmart to $120, maintaining a Buy rating on the shares, with expectations of a fourth-quarter earnings per share (EPS) that surpasses both the consensus and the company’s own guidance.
RBC Capital Markets has lifted Walmart’s stock price target to $109 from $105, reflecting confidence in Walmart’s ability to navigate current economic challenges. Walmart’s pricing leverage, power to negotiate with suppliers, and potential in alternative profit streams are seen as significant advantages. Lastly, UBS analysts have raised Walmart’s stock price target to $113 from $100, highlighting the importance of Walmart’s membership businesses, Walmart Plus and Sam’s Club, in enhancing the company’s profitability.
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