Bernstein raises Walmart stock price target to $117 from $106

On Tuesday, Bernstein analysts, led by Zhihan Ma, increased the price target on Walmart (NYSE:WMT) shares to $117.00, up from the previous $117.00, while reaffirming an Outperform rating on the retail giant. With a market capitalization of $826.8 billion, Walmart’s stock is currently trading near its 52-week high, according to InvestingPro data.

The analysts highlighted Walmart’s performance, noting that the company has consistently surpassed its long-term growth algorithm. Over the past 12 months, Walmart has achieved approximately 5% net sales growth and around 10% EBIT growth, outpacing the targeted 4% top-line growth and 4-8% EBIT growth. InvestingPro data confirms this strong performance, showing revenue growth of 5.48% and impressive returns across multiple timeframes. InvestingPro subscribers have access to 18 additional key insights about Walmart’s financial health and growth prospects.

Bernstein anticipates that Walmart may continue to provide conservative guidance, which has been a typical approach for the company’s management. Despite the conservative outlook, the firm does not expect this to hinder the positive momentum seen in Walmart’s stock, given the company’s history of prudent guidance. The company maintains a strong financial health score of "GOOD" according to InvestingPro’s comprehensive analysis, which evaluates multiple financial metrics and growth indicators.

The analysts also pointed out that Walmart’s valuation reflects high expectations, and to justify this, the company must maintain its robust sales growth trajectory. Additionally, Walmart needs to demonstrate its ability to structurally enhance margins. This involves expanding high-margin alternative revenue streams and reducing core e-commerce costs.

A recent strategic move by Walmart could significantly impact its operational efficiency. The company announced a partnership with Symbotic to automate same-day fulfillment. Bernstein analysts believe this could be a pivotal development for Walmart, potentially enabling it to reduce losses associated with same-day delivery services.

In other recent news, Walmart has been the subject of several analysts’ updates. Citi analysts raised their price target for Walmart to $120, maintaining a buy rating, with expectations of a fourth-quarter earnings per share (EPS) that surpasses both the consensus and the company’s own guidance. Citi also anticipates Walmart’s net sales to rise by 3.9% in the reported quarter.

RBC Capital Markets increased Walmart’s price target from $105 to $109 while maintaining an Outperform rating. The firm expressed confidence in Walmart’s ability to navigate through economic challenges, attributing it to the company’s pricing leverage, power to negotiate with suppliers, and potential in alternative profit streams.

UBS analysts led by Michael Lasser raised Walmart’s price target to $113, maintaining a buy rating. The optimism is rooted in the potential of Walmart’s membership businesses, Walmart Plus and Sam’s Club, to significantly boost the company’s earnings per share (EPS) growth.

In addition to these updates, Walmart Canada announced plans to invest $6.5 billion in store and supply chain expansion. The investment includes the construction of new stores and a new distribution center. Walmart also entered into an agreement with Canada Cartage to purchase Walmart Canada’s fleet business.

Lastly, Symbotic Inc (NASDAQ:SYM). is set to acquire Walmart’s Advanced Systems and Robotics business and sign a related commercial agreement. This strategic move is expected to add more than $5 billion to Symbotic’s future backlog and enhance its product offerings.

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