JPMorgan maintains overweight Walmart stock with $112 target

On Thursday, JPMorgan analyst Christopher Horvers maintained an Overweight rating on Walmart stock (NYSE: NYSE:WMT), with a steady price target of $112.00. As a prominent player in the Consumer Staples Distribution & Retail industry with $681 billion in trailing twelve-month revenue, Walmart has demonstrated strong market performance, delivering a remarkable 63.5% return over the past year. According to InvestingPro analysis, the stock is currently trading above its Fair Value. Walmart’s recent financial outcomes surpassed expectations, with earnings per share (EPS) of $0.61, which was 5% higher than the anticipated $0.58, according to Consensus Metrix. The company’s U.S. comparable sales growth of 4.5% exceeded both the 3.8% predicted by analysts and the mid-to-high 3% range expected by investors. This increase was fueled by a rise in transactions and the average ticket size, particularly driven by grocery and health & wellness sectors.

The positive performance in these departments helped offset a slight downturn in general merchandise, despite an increase in units sold. Walmart’s enterprise gross margin saw a year-over-year improvement of approximately 12 basis points to 24.2%, slightly below analyst expectations but surpassing JPMorgan’s forecast. Conversely, the operating margin declined by roughly 10 basis points year-over-year to 4.3%, which still came in 10 basis points above the anticipated figure.

Walmart’s EPS growth of about 1% year-over-year was noted, despite facing challenges such as the calendar effects, foreign exchange rates, and investment pressures. The company’s ability to outperform in key areas like grocery and health & wellness contributed to its solid financial results, indicating a robust consumer demand in these segments.

The analyst’s reiteration of the Overweight rating and the $112.00 price target suggests confidence in Walmart’s consistent performance and potential for continued growth. This assessment follows the company’s demonstrated ability to navigate a competitive retail landscape and deliver results that exceed market expectations.

In other recent news, Walmart’s financial performance for the first quarter has been a focal point for analysts. The retail giant reported adjusted earnings per share (EPS) of $0.61, surpassing consensus estimates of $0.58. Walmart’s U.S. same-store sales increased by 4.5%, exceeding expectations of 3.9%, driven by a rise in customer traffic and average ticket size. Analysts from Goldman Sachs, Barclays (LON:BARC), BMO Capital Markets, Truist Securities, and Evercore ISI have all maintained positive ratings on Walmart’s stock, with price targets ranging from $99 to $110.

Goldman Sachs reaffirmed a Buy rating, while Barclays and BMO Capital Markets maintained Overweight and Outperform ratings, respectively. Truist Securities also maintained a Buy rating, citing Walmart’s strong U.S. comparable sales growth and EBIT increase. Evercore ISI reiterated an Outperform rating, noting stable operating income despite tariff challenges. The company’s e-commerce and advertising segments have shown significant growth, contributing to its robust performance. While Walmart did not provide specific second-quarter EPS guidance, it confirmed its full-year targets, indicating confidence in its ongoing business momentum.

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