Key Stats for Walmart Stock
- Price change for Walmart stock in the last 6 months: -6%
- $WMT Stock Price as of Oct. 15: $118
- 52-Week High: $135
- $WMT Stock Price Target: $127
Now Live: Discover how much upside your favorite stocks could have using TIKR’s new Valuation Model (It’s free)>>>
What Happened?
Walmart (WMT) is getting a lift after Deutsche Bank upgraded it from Neutral to Buy on Thursday.
Analyst Krisztina Katai says higher inflation should help Walmart. Shoppers want value, and that plays to its strengths. She also thinks investors are starting to look past the weak U.S. comp number.
That number was soft as U.S. comp sales rose 2.6% in Q2, the slowest pace since Q4 of 2020. But Walmart says much of the drag comes from pharmacy.
New drug price rules cut about 1.25 percentage points from the comp and core categories have held in a steady 3% to 4% range.
The rest of the quarter looked strong:
- Membership fee revenue rose 17%.
- Sales rose 5% in constant currency.
- Global e-commerce sales grew 23%.
- Advertising grew 38%, and U.S. marketplace sales grew 52%.
Those last three are higher-profit businesses, so they help margins.
Management also raised its full-year outlook. It now expects sales to grow 4% to 5% and operating income to grow 7% to 8.5%. EPS is guided to $2.80 to $2.87.
See analysts’ growth forecasts and price targets for Walmart stock (It’s free) >>>
What the Market Is Telling Us About Walmart Stock
Investors seem to be betting that Walmart stock can win in a tough spending climate.
September inflation hit 3.7%, up from 3.4% in August. Grocery prices rose 1.8% but were roughly flat from the prior month.
Katai spoke with CFO John David Rainey. He said consumer trends were stable to improving compared with three months ago. He also said Walmart’s price gaps versus rivals remain strong.
Walmart is backing that up with lower prices. It ran more than 11,000 rollbacks last quarter, up from 7,200 at the end of Q1.
Private-label sales are also growing as a share of the mix, up 1.3 percentage points from last year.
The company is pushing fashion brands like Scoop, Free Assembly and Scenario to attract higher-income shoppers.
The price cuts will weigh on near-term profit, and Walmart expects Q3 operating income growth of just 2% to 4%.
It also sees more than $2 billion in extra fuel costs this year. Q2 profit growth of 17.4% also got a boost from tariff refunds, so the underlying number was lower.
For now, the market is looking past the soft comp. Walmart stock is being treated as a share-gainer in a tight consumer environment.
Estimate a company’s fair value instantly (Free with TIKR) >>>
So what is Walmart stock actually worth?
TIKR lets you forecast the future price of any stock in less than a minute. Just enter a few assumptions into TIKR’s valuation model and see what WMT stock could be worth. Start from Wall Street consensus estimates, or adjust the inputs to reflect your own view of the business. It’s free to use.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
