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Investing.com - Bernstein SocGen Group has raised its price target on Walmart (NYSE:WMT) to $117.00 from $113.00 while maintaining an Outperform rating, following the retailer’s mixed second-quarter results. According to InvestingPro data, 11 analysts have recently revised their earnings estimates upward for the upcoming period, with analyst targets ranging from $64 to $127.
Walmart reported a 5.6% constant currency net sales growth, exceeding its previous guidance of 3.5%-4.5%, but fell short on adjusted constant currency EBIT growth at just 0.4%, according to Bernstein analyst Zhihan Ma. The EBIT growth was negatively impacted by higher self-insured general liability claims, which created a 560 basis point headwind. The retail giant, with a substantial market capitalization of $782.56 billion, maintains strong financial health according to InvestingPro’s comprehensive analysis.
The retailer’s U.S. comparable sales increased 4.5%, surpassing consensus expectations of 4.0%. However, Walmart’s gross margin of 24.5% came in 30 basis points below consensus as strength in the U.S. market was offset by pressure in international operations.
Walmart’s adjusted earnings per share reached $0.68, missing consensus estimates by 4 cents. The company’s global advertising revenue showed strong performance, growing 46% in the second quarter, which includes contributions from its VIZIO acquisition.
Bernstein expressed confidence in Walmart’s long-term earnings algorithm, projecting that Walmart’s U.S. e-commerce business will reach approximately 9% subsidized contribution margin by achieving efficiency gains in last-mile delivery, growing retail media, and reducing e-commerce fulfillment costs through automation.
In other recent news, Walmart reported its second-quarter earnings, which fell short of analyst expectations. The company announced adjusted earnings per share of $0.68, missing the consensus estimate of $0.73 due to higher-than-expected claims costs impacting quarterly EBIT. Despite this earnings miss, Walmart raised its full-year guidance. Analysts have responded with mixed ratings; Bank of America Securities reiterated a Buy rating with a $120.00 price target, citing strong grocery performance. Meanwhile, Raymond (NSE:RYMD) James maintained an Outperform rating with a $105.00 price target, and Goldman Sachs also kept its Buy rating with a $101.00 target. Telsey Advisory Group raised its price target to $118.00, expressing confidence in Walmart’s ecosystem growth. Mizuho (NYSE:MFG) reiterated its Outperform rating with a $115.00 target, noting that U.S. comparable sales are trending positively despite some consumer pushback. These developments reflect varied analyst perspectives on Walmart’s financial health and strategic direction.
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