On Friday, BofA Securities updated its outlook on Walmart Inc. (NYSE: NYSE:WMT) stock, increasing the price target from $67.00 to $75.00 while maintaining a Buy rating.
The adjustment reflects an anticipated improvement in long-term profitability driven by various factors including the company's digital advertising ventures.
The retail giant's digital advertising arm is expected to generate $3.4 billion in fiscal 2024. This, along with growth in Walmart's membership program, data ventures, third-party marketplace, and fulfillment services—which saw an 80% year-over-year increase in the first fiscal quarter—contributed to a significant operational income gain.
These elements were key to the third of the over $900 million year-over-year operational income increase in the first fiscal quarter.
BofA Securities highlighted Walmart's continuous investments in employee wages, supply chain enhancements, automation, and sales mix initiatives as additional factors supporting the stock's upside potential. These strategic moves are seen as bolstering the company's strong top-line momentum.
The revised price target is based on a 28-29 times multiple of the adjusted earnings per share estimate for fiscal 2026, which has been increased by 10 cents to $2.60. The firm's previous estimate was based on approximately 27 times the earlier earnings projection.
The analyst's comments underscore the belief that Walmart's ongoing improvements in e-commerce losses and various business expansions are likely to propel the company's financial performance in the coming years.
InvestingPro Insights
As Walmart Inc. (NYSE: WMT) continues to evolve its business model, real-time data from InvestingPro provides a nuanced view of the company's financial health and market position. With a market capitalization of $515.91 billion and a P/E ratio of 25.68, Walmart is a heavyweight in the Consumer Staples Distribution & Retail industry. The company's revenue for the last twelve months as of Q4 2024 stands at an impressive $648.12 billion, marking a growth of 6.03%.
InvestingPro Tips highlight Walmart's robust financial practices, including a perfect Piotroski Score of 9, which signals strong fiscal conditions and operations. Moreover, the retailer has demonstrated a commitment to shareholder returns, having raised its dividend for 29 consecutive years, with a dividend yield of 1.3% and a growth of 11.16% in the last twelve months as of Q4 2024.
For investors seeking a deeper dive into Walmart's performance metrics and strategic outlook, InvestingPro offers additional insights. There are 13 more InvestingPro Tips available that could further inform investment decisions, including analysis on Walmart's earnings multiples and debt levels. Interested readers can unlock these valuable tips with a special offer: use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at https://www.investing.com/pro/WMT.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.