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Tuesday, Morgan Stanley (NYSE:MS) reaffirmed its positive stance on Walmart Inc. (NYSE:WMT), maintaining an Overweight rating and a price target of $115.00. The firm’s analysts highlighted a significant increase in Walmart+ membership in April 2025, marking a new peak in the five-year history of their Consumer Pulse survey. The survey, which Morgan Stanley believes to be a reasonable measure of the Walmart+ program’s membership, suggests approximately 27.3 million current members. Even after adjusting for potential response errors, this figure represents around 17.7 million members, indicating about 21% penetration of U.S. households, or roughly 14% when adjusted. This positive outlook aligns with Walmart’s strong market performance, with the stock delivering a 67.78% return over the past year. According to InvestingPro data, the retail giant currently commands a market capitalization of $794.73 billion.
The survey’s findings also show a year-over-year growth of about 35% in membership count on a rolling three-month basis, which helps to mitigate the volatility in survey responses. Although the absolute growth rate may be overstated due to sampling error, the trend is consistent with Walmart’s management commentary. The company has reported that Walmart+ membership is continuing to expand at a strong pace, which has been contributing to double-digit membership income growth during the fourth quarter of 2024 and is likely to continue into the first quarter of 2025. With Walmart’s next earnings report scheduled for May 15, 2025, investors are eagerly anticipating updates on this growth trajectory.
Walmart+ membership growth is a crucial aspect of Walmart’s alternative profit model. It leverages the company’s leading position in the grocery sector to foster customer loyalty, particularly in the repeat purchase category. Additionally, the program has been successful in attracting middle- and high-income shoppers to the Walmart brand. It also provides a high-margin recurring revenue stream and bolsters eCommerce penetration in general merchandise. This, in turn, enhances platform monetization through advertising revenue via Walmart Connect and through data gathering, which is valuable for the retail giant’s business strategy. With total revenue reaching $680.99 billion in the last twelve months and an overall "GOOD" financial health score according to InvestingPro, Walmart continues to demonstrate strong operational execution. Discover more insights about Walmart’s valuation and growth potential through InvestingPro’s comprehensive research reports, available for over 1,400 top US stocks.
In other recent news, Walmart has announced the issuance of $4 billion in senior unsecured notes, a move aimed at managing its capital structure. The issuance includes various tranches with different interest rates and maturities, and the proceeds are intended for general corporate purposes. In addition, DA Davidson has maintained a Buy rating on Walmart stock with a $117 price target, anticipating that the company’s upcoming earnings report will demonstrate market share gains and a comparable sales beat. This sentiment is echoed by TD Cowen, which also reiterated a Buy rating and set a $115 price target, highlighting Walmart Connect as a competitive advantage in retail media.
Furthermore, Walmart has entered into a strategic partnership with Upstart (NASDAQ:UPST) through OneProgress Services LLC, a fintech company it majorly owns. This collaboration aims to market Upstart’s consumer lending products to Walmart’s vast customer base, although it is not expected to materially impact Upstart’s financial results for the fiscal year. Mizuho (NYSE:MFG) analyst Dan Dolev views this partnership positively, citing it as a validation of Upstart’s lending capabilities. These developments reflect Walmart’s continued efforts to strengthen its market position and leverage its extensive reach.
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