Analysts’ ratings and target price
The majority of Wall Street analysts continue to have a “neutral” outlook on Walmart (WMT) stock. They believe the heightened competition from Amazon (AMZN), Target (TGT), and Costco (COST) could pressure its sales and earnings growth. However, they believe its near-term prospects look bright, especially with the key holiday season just around the corner.
Of the 34 analysts covering Walmart stock, 19 have recommended a “hold,” and 15 have recommended a “buy.” They have a consensus target price of $105.07 per share, which indicates an upside potential of 8.2% based on its closing price of $97.08 on October 9.
Big-box retailers are likely to benefit in the near term from an improving macro backdrop. Record-low unemployment, improved wages, and higher consumer confidence are expected to drive retailers’ top lines.
Walmart remains well positioned to gain from the improving macro environment. It has significantly scaled its e-commerce business, which is expected to drive traffic. It has also expanded its online grocery pickup and delivery services to more locations and is providing numerous time- and money-saving offerings.
Walmart’s investment in price, its focus on merchandise, and its omnichannel offerings could benefit from the optimism surrounding the upcoming holiday season.