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On Tuesday, TD Cowen analysts maintained their positive stance on Walmart (NYSE: NYSE:WMT) shares, reiterating a Buy rating and a $115.00 price target. With a substantial market capitalization of $755 billion and annual revenue exceeding $680 billion, the retail giant’s media network, Walmart Connect, represents a potential competitive advantage over Amazon (NASDAQ:AMZN) due to its capacity to reach consumers through both online and offline media. According to InvestingPro data, Walmart has demonstrated impressive performance with a 55% return over the last year. They noted that Walmart’s proximity to customers, with 90% of the U.S. population living within 10 miles of a Walmart store, could be a significant factor in its ability to stand out to suppliers.
The analysts also pointed out Walmart’s growing digital marketplace, which now boasts 700 million SKUs compared to Amazon’s over 5 billion. Despite this, Walmart’s management is consciously keeping advertising loads in check to avoid disrupting the consumer experience. With a solid revenue growth of 5.07% and a GOOD Financial Health Score from InvestingPro, TD Cowen believes that Walmart Connect’s ability to provide enhanced data transparency, offering real-time insights into both offline and online shopper behavior, will enable more efficient conversion rates and accelerate omnichannel growth compared to Amazon’s more restrictive approach.
Walmart Connect offers various in-store retail media options that are unique to the retailer, such as advertisements on TV walls, sampling opportunities for pickup and delivery services, in-store demonstrations, self-checkout screen promotions, in-store audio announcements, and digital screens in the deli and bakery sections. These avenues provide Walmart with unique customer engagement opportunities that could further differentiate its advertising platform from competitors.
The analysts’ reiterated Buy rating and price target reflect their long-term preference for Walmart’s retail media potential through Walmart Connect. With a strong analyst consensus rating of 1.55 (Strong Buy) and comprehensive analysis available in the InvestingPro Research Report, they believe that the strategic use of in-store and digital media could drive Walmart’s growth and enhance its position in the competitive retail landscape. InvestingPro subscribers have access to over 30 additional key metrics and insights about Walmart’s financial health and market position.
Walmart’s stock price target has been set with the expectation that the company’s comprehensive approach to connecting with consumers will continue to support its market performance. The analysts at TD Cowen stand firm in their view that Walmart’s innovative strategies in retail media will contribute to the company’s success.
In other recent news, Walmart has been actively engaging in strategic initiatives to bolster its e-commerce and overall business performance. The company reported a U.S. e-commerce growth rate exceeding 20%, with analysts projecting continued expansion as Walmart enhances its third-party marketplace and improves profitability through automation and cost-cutting measures. Despite challenges in the current sales landscape, Walmart reaffirmed its financial guidance for the fiscal year 2026, underscoring its resilience and adaptability. Analysts from firms like Raymond (NSE:RYMD) James and UBS have adjusted their price targets for Walmart, reflecting a slightly conservative outlook amidst market uncertainties, yet maintaining positive ratings such as "Outperform" and "Buy" respectively. RBC Capital also revised its price target to $102, citing a more cautious stance due to potential tariff impacts and a less favorable sales environment.
Walmart’s recent Investment Community Meeting highlighted advancements in automation and merchandising, which are expected to drive significant EBIT growth. The retailer’s strategic focus on high-margin initiatives, such as advertising technology and membership programs, is anticipated to contribute to sustainable profit streams. President Donald Trump’s upcoming meeting with major retailers, including Walmart, will address the impact of tariffs on their operations, a topic of concern for businesses importing goods from China. Meanwhile, Walmart’s competitive positioning in the e-grocery sector and its appeal to higher-income consumers as a trade-down option during economic downturns are seen as key strengths. These developments indicate Walmart’s ongoing efforts to navigate market challenges while pursuing growth and profitability.
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