Analysts’ target price
Due to Walmart’s (WMT) stronger-than-expected fiscal first-quarter earnings, a few analysts increased their target price on the stock. J.P. Morgan increased the target price on Walmart stock to $110 from $108. RBC raised the target price to $104 from $102. Walmart’s better e-commerce margins, favorable merchandise mix, and strong comparable sales in its US business are expected to support the stock. However, price investments, competitive headwinds, and tough YoY (year-over-year) comparisons could limit the upside in the stock.
Among the 32 analysts providing recommendations on Walmart stock, 16 recommended a “buy,” 15 recommended a “hold,” and one recommended a “sell.” Analysts maintained a consensus target price of $108.93 on Walmart stock, which implies a potential upside of 7.5% based on its closing price of $101.31 on May 16.
Walmart shares have risen 8.8% on a YTD (year-to-date) basis. Impressive US comparable sales, a better-than-expected performance on the earnings front, and growth in digital sales are driving Walmart stock. However, competitive headwinds and pressure on the company’s profitability could limit the upside.