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Bank of America Affirms $190 Price Target for Walmart, Forecasts Strong Sales Growth Over Cost Concerns

BusinessBank of America Affirms $190 Price Target for Walmart, Forecasts Strong Sales Growth Over Cost Concerns

BofA’s Confidence in Walmart: An Overview

On Wednesday, BofA Securities expressed continued confidence in Walmart Inc. (NYSE:WMT), maintaining a Buy rating and a $190.00 price target for the retail giant’s shares. The firm’s optimism is rooted in several growth drivers, including Walmart’s digital advertising, the Walmart Plus membership program, and the rapid expansion of its third-party marketplace and fulfillment services. These elements are expected to contribute to sales growth outpacing cost increases over the next five years.

Growth Drivers for Walmart

Walmart’s Strategic Investments

The investment firm highlights Walmart’s strategic investments in employee wages, pricing, supply chain, automation, and sales mix initiatives as key factors that will likely enhance long-term profitability. Moreover, Walmart’s efforts to achieve profitability in its first-party U.S. e-commerce segment by utilizing its stores to fulfill orders and activate local delivery networks, including through its Spark Driver program, were underscored as part of the company’s broader strategy.

Projections for Walmart’s Fourth-Quarter Earnings

Anticipated Earnings and Sales Growth

BofA Securities anticipates Walmart will announce its fourth-quarter fiscal year 2024 earnings on February 20, projecting an adjusted earnings per share (EPS) of $1.61 and a 2.0% increase in U.S. comparable sales. These figures are slightly below the consensus estimates compiled by Visible Alpha. The forecasted deceleration in growth compared to the third quarter’s 4.9% rise is attributed to moderating grocery inflation and an expected continuation of softness in general merchandise sales.

Potential Positive Surprises

Despite the anticipated slowdown, BofA Securities suggests there could be potential for positive surprises in Walmart’s financial results. The basis for this expectation is the strong sales and transaction data observed for Walmart in the fourth quarter, as reported by Bloomberg Second Measure’s analysis of credit and debit card transactions. This data hints at the possibility that Walmart’s performance could exceed forecasts.

Analyst Recommendations and Market Outlook

Analyst Ratings and Price Targets

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C. Walmart (NYSE:WMT – Get Free Report) had its price target boosted by stock analysts at JPMorgan Chase & Co. from $163.00 to $176.00 in a report issued on Monday. The brokerage currently has a “neutral” rating on the retailer’s stock.

Market Consensus and Investor Insights

MarketBeat Week in Review – 2/12 – 2/16 Other research analysts also recently issued research reports about the company. Evercore ISI lowered their target price on Walmart from $187.00 to $177.00 and set an “outperform” rating for the company in a research note on Friday, November 17th. Morgan Stanley lowered their target price on Walmart from $170.00 to $168.00 and set an “overweight” rating for the company in a research note on Friday, November 17th.

Walmart’s Financial Performance and Insider Activity

Quarterly Earnings and Revenue

Walmart (NYSE:WMT – Get Free Report) last posted its quarterly earnings results on Thursday, November 16th. The retailer reported $1.53 EPS for the quarter, meeting analysts’ consensus estimates of $1.53. The business had revenue of $160.80 billion during the quarter, compared to the consensus estimate of $159.65 billion. Walmart had a return on equity of 21.20% and a net margin of 2.55%. Walmart’s revenue for the quarter was up 5.2% compared to the same quarter last year.

Insider Buying and Selling

In other news, CEO C Douglas Mcmillon sold 9,708 shares of Walmart stock in a transaction on Wednesday, November 22nd. The stock was sold at an average price of $154.91, for a total transaction of $1,503,866.28. Following the sale, the chief executive officer now directly owns 1,442,099 shares in the company, valued at approximately $223,395,556.09.

Institutional Investors’ Perspective

Investment Trends and Institutional Ownership

A number of hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Kozak & Associates Inc. grew its holdings in Walmart by 1,490.0% during the 3rd quarter. Kozak & Associates Inc. now owns 159 shares of the retailer’s stock valued at $25,000 after buying an additional 149 shares in the last quarter.

About Walmart

Business Overview and Segments

Walmart Inc. engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam’s Club. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores under Walmart and Walmart Neighborhood Market brands; membership-only warehouse clubs; ecommerce websites, such as walmart.com, walmart.com.mx, walmart.ca, flipkart.com, and samsclub.com; and mobile commerce applications.

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