Walmart: Analysts’ Recommendations before Fiscal 3Q18 Earnings
Is the risk-reward scenario balanced?
Walmart (WMT) has reported improved top-line and bottom-line results in the first half of fiscal 2018. The company is witnessing improved in-store performance, driven by the rise in traffic and average transaction size. Price investments, improved merchandising, fresh offerings, and store remodeling are driving shoppers to its stores.
The company’s e-commerce business is growing at a brisk pace. Fast delivery and convenient shopping experiences help drive the company’s digital business higher, boosting its market share. Consumer-friendly initiatives, which we discussed in the previous part of this series, are strengthening its competitive positioning.
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However, pressure on earnings stemming from low pricing and increased competition could restrict the company’s growth rate.
About 47.0% of the analysts recommended a “buy” on Walmart stock. Meanwhile, an equal number of analysts provided “hold” recommendations. Plus, 6.0% of the 32 analysts covering the stock maintained their “sell” ratings.
Walmart stock closed at $90.26 on November 8, 2017, which is 2.4% above the analysts’ 12-month target price of $88.08 per share.
Recently, two analysts raised their target price on Walmart stock. KeyBanc Capital increased its target price to $100.00 from $90.00 and maintained its “overweight” recommendation. Deutsche Bank raised its target price to $84.00 from $81.00 on WMT stock with a “hold” rating.