Analysts’ target prices
Several analysts raised their target prices on Walmart (WMT) stock following one of the best quarterly performances in decades. Analysts made the following upward revisions to their target prices:
- Credit Suisse: increased to $103 from $85
- Jefferies: increased to $112 from $106
- Gordon Haskett: increased to $99 from $92
- KeyBanc: increased to $107 from $105
- Telsey Advisory Group: increased to $107 from $105
- Morgan Stanley: increased to $98 from $93
- Cowen: increased to $115 from $105
- RBC: increased to $102 from $90
- Raymond James: increased to $107 from $100
Among the 31 analysts covering Walmart stock, 19 analysts have a “hold” recommendation, while 12 analysts have a “buy” recommendation. Analysts suggest a target price of $103.48 on Walmart stock, which indicates an upside of 5.8% based on its closing price of $97.85 on August 17. In comparison, most of the analysts have a “buy” on Costco (COST) stock. Most of the analysts maintained a “hold” on Target (TGT).
Raymond James cut its rating on Walmart stock
Despite increasing the target price on Walmart stock following its stellar second fiscal quarter results, analyst Budd Bugatch of Raymond James downgraded Walmart shares from “strong buy” to “outperform.” Notably, Raymond James maintained a favorable outlook on Walmart’s long-term prospects, which was reflected in the “outperform” rating.
However, analyst Budd Bugatch stated that Walmart’s investment to acquire a majority stake in Flipkart could pressure the company’s profitability in the next few years.
On August 18, Walmart announced that it closed the Flipkart deal. Now, Walmart is the largest shareholder in India’s leading e-commerce company. Walmart acquired ~77% stake in Flipkart for $16 billion. Management reiterated that the Flipkart acquisition will likely have a negative impact on its fiscal 2019 EPS by $0.25–$0.30. Walmart’s management sees a headwind of $0.60 on its fiscal 2020 EPS.