Mizuho reiterates Outperform rating on Walmart stock with $115 target

Investing.com - Mizuho (NYSE:MFG) has reiterated an Outperform rating on Walmart (NYSE:WMT) stock with a price target of $115.00 following the company’s second-quarter earnings miss. The retail giant, currently valued at $778.6 billion, generated impressive revenues of $685.1 billion in the last twelve months, according to InvestingPro data.

The research firm noted that despite the earnings disappointment, nothing is "thesis changing" for Walmart, with U.S. comparable sales trending in the mid-single-digit percentage range, although some pushback from lower-end consumers was observed as expected. The company maintains a "GOOD" Financial Health score on InvestingPro, reflecting its strong market position and consistent performance.

Mizuho highlighted that July finished stronger for Walmart, with positive momentum extending into mid-August, including a pivot to low-single-digit percentage growth in general merchandise at both Walmart and Sam’s Club locations.

The firm also pointed out that price markups were lower than anticipated as triple-digit tariffs lessened, making RIM accounting a non-event, while management is monitoring Hispanic customer trends but hasn’t identified any specific top-line headwinds from this segment.

Regarding inflation, Mizuho reported that Walmart does not expect a "shock" increase in like-for-like inflation compared to the 1.1% seen in Q2, even as tariff costs gradually phase in, with the pricing environment remaining highly fluid.

In other recent news, Walmart’s second-quarter earnings report has drawn significant attention from analysts and investors alike. The retail giant reported adjusted earnings per share of $0.68, which fell short of the consensus estimate of $0.73. Despite this earnings miss, Walmart’s revenue for the quarter was $177.4 billion, surpassing market forecasts. The company also raised its full-year guidance, although higher-than-expected claims costs of approximately $450 million impacted quarterly earnings before interest and taxes (EBIT).

Several analyst firms have weighed in on Walmart’s performance. Bank of America Securities maintained its Buy rating with a price target of $120.00, highlighting strong grocery sales. Raymond (NSE:RYMD) James reiterated an Outperform rating with a $105.00 price target, despite the earnings shortfall. Goldman Sachs also kept its Buy rating, setting a price target of $101.00, while Morgan Stanley (NYSE:MS) maintained an Overweight rating with a $115.00 target, citing strong revenue growth. Evercore ISI reiterated an Outperform rating, noting the company’s revenue exceeded expectations, although gross profit margins increased less than anticipated. These recent developments reflect a mixed but cautiously optimistic outlook from analysts regarding Walmart’s financial performance.

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