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Investing.com - Bernstein SocGen Group reiterated an Outperform rating and $117.00 price target on Walmart (NYSE:WMT) in a research note released Thursday. The retail giant, currently valued at over $800 billion, maintains strong financial health according to InvestingPro data, with 18 analysts recently revising their earnings estimates upward.
The firm’s analysis focuses on Walmart’s potential earnings power upside from several key growth areas, including e-commerce profitability, retail media expansion, and value realization from Indian investments. With annual revenues reaching $693 billion and a robust return on equity of 24%, Walmart demonstrates significant operational scale and efficiency.
Bernstein estimates Walmart’s U.S. e-commerce currently operates at a -6.7% EBIT margin on a fully loaded, unsubsidized basis, but sees a path to profitability by fiscal year 2030 through fulfillment automation and delivery route densification, potentially contributing approximately 90 basis points to Walmart U.S. margin improvement.
The research note projects Walmart’s U.S. retail media business will grow from 3% of gross merchandise value today to approximately 5%, while its U.S. GMV doubles to over $200 billion, potentially expanding retail media revenue from approximately $3 billion to $10 billion and contributing roughly 85 basis points of margin expansion.
Bernstein concludes that with upside from unlocking value in Indian stakes and the Walmart U.S. segment reaching mature profitability, the retailer is trading at approximately 22-25.5x P/E, below its historical average of 26.1x. Current InvestingPro analysis indicates the stock is trading above its Fair Value, with comprehensive metrics and detailed valuation analysis available in the Pro Research Report, part of InvestingPro’s coverage of 1,400+ top US stocks.
In other recent news, Walmart has announced plans to open its first branded stores in South Africa by the end of 2025, with official opening dates expected to be revealed in October. The new stores will feature a variety of products, including groceries, apparel, and technology, while incorporating locally sourced items. Additionally, Walmart’s CFO, John David Rainey, has adopted a new stock trading plan under Rule 10b5-1, which allows for the sale of up to 40,000 shares of Walmart common stock in two tranches. Tigress Financial Partners has raised Walmart’s stock price target to $125, maintaining a Buy rating, and highlighted Walmart’s improved operating efficiency through automation and technology. Moreover, Walmart+ has expanded its entertainment offerings by adding Peacock as a streaming partner, allowing members to choose between Peacock and Paramount+ at no additional cost. In another development, Walmart has partnered with Broadcom to enhance its cloud infrastructure, designating Broadcom as a strategic vendor for virtualization software solutions. This collaboration will see the deployment of Broadcom’s VMware Cloud Foundation across Walmart’s global operations.
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