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Will Walmart Maintain Its Growth Momentum in Fiscal 2019?

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Part 6
Will Walmart Maintain Its Growth Momentum in Fiscal 2019? PART 6 OF 6

What Do Analysts Suggest for Walmart?

Rating summary

Most of the analysts providing a recommendation on Walmart (WMT) stock maintained a “neutral” outlook. Of the 33 analysts, ~50.0% of them recommended a “hold,” 42.0% recommended a “buy,” and 3.0% recommended a “sell.”

What Do Analysts Suggest for Walmart?

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Walmart is expected to report healthy top and bottom-line growth in coming years due to its growing e-commerce business and improved store traffic. The company’s digital initiatives, supply-chain reinvention, multi-channel offerings, store remodeling, and improved merchandising are expected to drive its sales higher.

Walmart’s bottom line is expected to grow and benefit from higher comps and a lower share count. However, pressure on its margins from the prolonged price war among retailers and the growing threat from Amazon (AMZN) in the grocery business keep analysts on the sidelines. Walmart’s increased price investments and focus on its e-commerce business will likely subdue its margins.

Recently, Goldman Sachs downgraded Walmart stock to “neutral” from “buy” due to the company’s current valuation. Goldman Sachs stated that Walmart looks fairly valued with the company’s growth initiatives being priced in—given the stock’s recent run.

Walmart stock has risen 8.2% since it reported its strong fiscal 3Q18 results on November 16. It closed at $97.28 on December 6, 2017, which reflects a potential upside of 3.3%—compared to analysts’ 12-month target price of $100.47 per share.

Peer comparison

Most analysts have a positive outlook on Costco (COST) stock due to its stellar top and bottom-line growth amid challenges. Analysts have a neutral stance on Target (TGT) stock.

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