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Walmart shares price target cut to $67 from $200 on stock split adjustment

Published 26/02/2024, 14:02
Updated 26/02/2024, 14:02
© Reuters

On Monday, Oppenheimer revised its price target for Walmart (NYSE:WMT), dropping it significantly to $67.00 from the previous $200.00. Despite the substantial adjustment, the firm maintains an Outperform rating on the retail giant's shares. The change in the price target is attributed to Walmart's recent 3-for-1 stock split, which took effect on the market today.

The stock split has adjusted the value of each share, warranting a recalibration of the price target to align with the new share structure. Following the split, the valuation of Walmart shares requires investors to consider the increased number of shares in circulation when assessing the company's market value.

Oppenheimer's adjustment reflects the mathematical impact of the stock split on the share price, rather than a change in the perceived value or performance of Walmart as a company. The new price target of $67 is directly proportional to the previous target, considering the tripling of the share count.

The firm reiterates its positive outlook for Walmart, signaling confidence in the company's prospects. Despite the reduction in the price target, the Outperform rating suggests that Oppenheimer continues to see Walmart as a favorable investment opportunity with potential for growth.

"WMT remains a top pick for us", Oppenheimer analyst says.

Investors and market watchers should note that the updated price target is a technical response to the stock split and does not indicate a shift in the fundamental assessment of Walmart's business or financial outlook. The retailer remains a top pick for Oppenheimer following the adjustment.

InvestingPro Insights

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With the recent 3-for-1 stock split of Walmart (NYSE:WMT), investors are keenly watching the retail giant's market metrics and performance indicators. A dive into the real-time data from InvestingPro reveals a company with a robust market presence and a history of financial consistency. Walmart's adjusted market capitalization stands at a solid $471.25 billion, underscoring its heavyweight status in the retail sector.

One notable InvestingPro Tip highlights Walmart's impressive track record of raising its dividend for 28 consecutive years, signaling a strong commitment to returning value to shareholders. This is further reinforced by the company's ability to maintain dividend payments for an even longer period of 52 consecutive years. Such a consistent dividend history often appeals to investors looking for reliable income streams.

When it comes to valuation, Walmart's price-to-earnings (P/E) ratio is currently at 30.59, and its price-to-book (P/B) ratio over the last twelve months as of Q4 2024 is 5.62. Although the P/E ratio suggests a premium relative to near-term earnings growth, Walmart's status as a prominent player in the Consumer Staples Distribution & Retail industry justifies investor confidence to some degree. Additionally, the company's revenue growth over the last twelve months was 6.03%, indicating a healthy expansion in its business operations.

For those seeking further insights and investment tips, there are additional InvestingPro Tips available for Walmart, which can be accessed through the InvestingPro platform. Prospective investors can use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, unlocking a wealth of financial data and expert analysis to inform their investment decisions.

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As market participants digest Oppenheimer's updated price target, these InvestingPro metrics provide a broader context for evaluating Walmart's financial health and investment potential post-stock split. With 17 analysts having revised their earnings downwards for the upcoming period, it's crucial for investors to stay informed with the latest data and trends.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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