Barclays maintains Walmart stock Overweight rating, $108 target

On Thursday, Barclays (LON:BARC) analyst Karen Short maintained an Overweight rating on Walmart (NYSE:WMT) stock with a steadfast price target of $108.00. With a market capitalization of $775 billion and an overall "GOOD" financial health score according to InvestingPro, Walmart’s solid performance in the first quarter showed consistent comparable store sales and strength in key growth areas such as membership, e-commerce, and advertising. Despite gross margins being slightly below consensus expectations at 24.85%, the company’s adjusted operating income grew by 3.0%, surpassing the guidance of 0.5-2.0% that had been revised at a recent investment community meeting.

Walmart’s adjusted earnings per share (EPS) for the first quarter reached $0.61, topping both the analyst’s and the consensus estimate of $0.58, as well as exceeding the company’s own guidance of $0.57-$0.58. With annual revenue of $681 billion and a 5.07% revenue growth rate, this increase was attributed to a modest benefit from below-the-line items, which included lower interest expenses, taxes, and minority interest. InvestingPro analysis reveals 12 additional key metrics and insights available for subscribers.

The retail giant confirmed its full-year guidance, with second-quarter sales projected to be above the full-year range. However, Walmart did not provide specific guidance for operating income or EPS for the second quarter. Walmart’s U.S. operations showed improvement, with comparable store sales up by 4.5%, which is consistent with the fourth quarter and above the anticipated 3.5-4.0% range.

Growth in the grocery sector remained robust, matching the previous quarter’s high teens increase, while general merchandise experienced a slight decline, contrasting with a slight increase in the fourth quarter. Inflation in grocery prices remained relatively stable, with a 150 basis point increase compared to 170 basis points in the last quarter. The average ticket also saw a rise of 2.8%, driven primarily by unit sales. As a prominent player in Consumer Staples, Walmart has maintained dividend payments for 53 consecutive years, with InvestingPro subscribers gaining access to detailed dividend analysis and comprehensive financial metrics in the Pro Research Report.

In other recent news, Walmart Inc. reported strong financial performance in its first quarter, surpassing the high-end of its initial guidance with impressive comparable sales growth. Despite this, Walmart has maintained its fiscal year 2026 earnings per share guidance, indicating a cautious approach amid potential tariff impacts. Analysts from BMO Capital, Truist Securities, Evercore ISI, and UBS have all maintained positive ratings on Walmart stock, emphasizing the company’s robust business trends and strategic advantages. BMO Capital and UBS both set price targets at $110, while Truist and Evercore ISI set theirs at $107 and $105, respectively.

Furthermore, Walmart and Alquist completed a significant construction project at the Owens Cross Roads Supercenter using 3D Concrete Printing technology, highlighting advancements in construction efficiency. This project reduced costs by 15% and material waste by 55% compared to traditional methods. The collaboration demonstrated the potential for 3D printing to transform retail expansions, with benefits such as reduced construction time and increased material efficiency. Patrick Callahan of Alquist and LB Johnson of Walmart both emphasized the scalability and innovation potential of this technology. This development aligns with Walmart’s strategy to streamline operations and reduce costs, ultimately benefiting customers.

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