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Investing.com - Telsey Advisory Group raised its price target on Walmart (NYSE:WMT) to $118.00 from $115.00 on Friday, while maintaining an Outperform rating on the retail giant’s stock. The company, currently valued at $782.56 billion, trades at a P/E ratio of 41.69x, reflecting premium market positioning. According to InvestingPro data, 11 analysts have recently revised their earnings estimates upward for the upcoming period.
The price target increase reflects Telsey’s confidence in Walmart’s expanded vision beyond traditional retail and e-commerce as the company builds what the firm describes as a "powerful ecosystem" that includes advertising, merchant services, and last-mile delivery capabilities. With annual revenue of $693.15 billion and a strong financial health score from InvestingPro, Walmart demonstrates robust operational execution.
Telsey noted these new business segments carry higher profit margins than Walmart’s traditional retail operations, which should enable the company to grow its operating income at a faster rate than its sales.
The firm expects Walmart to remain a market share gainer in the retail industry, citing its defensive, value-priced product mix, strong customer focus, and technology investments, including artificial intelligence initiatives.
Telsey’s new price target is based on applying an unchanged price-to-earnings multiple of approximately 40 times to its revised 2026 earnings per share estimate of $2.97.
In other recent news, Walmart’s latest earnings report has drawn significant attention from analysts and investors. The company reported adjusted earnings per share of $0.68 for the second quarter, which fell short of consensus estimates. This earnings miss was attributed to approximately $450 million in higher-than-expected claims costs impacting quarterly earnings before interest and taxes. Despite this, Walmart raised its full-year guidance, indicating confidence in its future performance. Analysts from firms such as Mizuho (NYSE:MFG), Bank of America Securities, and Morgan Stanley (NYSE:MS) have maintained positive ratings on the stock, with Mizuho and Morgan Stanley both setting a price target of $115. Bank of America Securities highlighted Walmart’s strong grocery performance, noting mid-single-digit growth in comparable sales. Raymond (NSE:RYMD) James and Goldman Sachs also reiterated their positive outlooks, citing Walmart’s overall strong revenue growth across various segments. These developments underscore the mixed reactions from analysts, balancing concerns over profit margins with optimism about revenue performance.
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