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Why Analysts’ Opinion about Walmart Improved after 1Q18 Results

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Ratings and price target summary

As the following graph shows, the majority of analysts remain neutral on Walmart (WMT) stock. However, after the company’s strong start to the current fiscal year and continued positive comps growth, the consensus rating has improved.

Given the company’s strong first quarter results and upbeat outlook, Walmart stock witnessed positive upgrades from several brokerage firms. Susquehanna raised its price target on Walmart to $92 from $80, while Barclays, which remains overweight on Walmart stock, raised its price target to $90 from $80. Meanwhile, UBS increased its target on the company’s stock from $73 to $80. J.P. Morgan also raised Walmart’s target price to $80 from $78, while RBC Capital Markets increased it to $74 from $67. Also, BMO Capital raised its outlook on the stock and currently has a “market perform” rating, up from its earlier “underperform” rating.

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Of the 35 analysts covering Walmart stock on May 19, 2017, 34.0% have recommended a “buy,” up from 32% before the company’s fiscal 1Q18 results. 57.0% have recommended a “hold,” and 9.0% have recommended a “sell.” Walmart was trading at $78.77 per share, which is ~1.0% lower than analysts’ 12-month price target of $79.55.

Peer comparisons

Of the 28 analysts covering Target (TGT), ~18.0% have recommended a “buy,” while 64.0% have recommended a “hold.” About 18.0% have recommended a “sell.” As for Costco (COST), the majority of analysts remain positive on the stock. 70.0% of the 30 analysts covering Costco have rated the stock a “buy,” while 30.0% have rated it a “hold.”

Of the 27 analysts covering Dollar Tree Stores (DLTR) stock, about 48.0% of analysts have rated the stock a “buy,” while an equal number of analysts have rated it a “hold,” and 4.0% have rated it a “sell.” As for Dollar General (DG), 40.0% of the 30 analysts covering the stock have rated it a “buy,” and 53.0% have rated it a “hold.” About 7.0% have rated it a “sell.”

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