What’s Keeping Analysts on the Sidelines on WMT Stock?
Analysts maintain neutral outlook
The majority of analysts providing ratings on Walmart (WMT) continue to maintain a neutral outlook on the stock. Walmart has reported strong fiscal 1H18 results, reflecting an improved sales performance. Meanwhile, the company posted its second straight quarterly bottom-line growth in more than two years.
The company’s price and business investments, multi-channel offerings, and digital initiatives are boosting its financial performance. However, increased competition poses challenges to its market share, especially in the grocery segment, and its continued price investments are hurting its margins, thus keeping analysts on the sidelines.
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Rating and target price
Analysts have a consensus score of 2.5 on Walmart stock on a scale of 1.0, which implies a “strong buy,” to 5.0, which represents a “strong buy.” Moreover, of the 33 analysts who have rated Walmart stock, 42% recommended a “buy,” 49% maintained a “hold,” and 9% have a “sell” rating. As of September 19, 2017, Walmart stock was trading 2.9% below the analysts’ target price of $82.40 per share.
In comparison, analysts are confident about Costco (COST) and Amazon (AMZN) stock. As for Costco, 66% of the analysts recommended a “buy,” and 34% rated it a “hold.” Meanwhile, for Amazon, 87% of the analysts rated its stock a “buy,” 9% have a “hold” rating, and 4% recommended a “sell.”
On the contrary, analysts maintain a neutral outlook on Target (TGT) and Kroger (KR) stock. Of the 25 analysts providing a recommendation on Target stock, 16% have a “buy” rating, 68% recommended a “hold,” and 16% maintained a “sell.” As for Kroger, 31% of the analysts maintained a “buy,” 58% recommended a “hold,” and 11% have a “sell” rating.