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Can Walmart’s Fiscal 4Q18 Results Raise Its Stock Higher?

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Part 6
Can Walmart’s Fiscal 4Q18 Results Raise Its Stock Higher? PART 6 OF 6

What Analysts Suggest for Walmart Stock

Walmart’s price target is on an uptrend

The graph below shows that analysts have raised their target prices for Walmart (WMT) stock in the past couple of months due to improving sales and profitability and the company’s ability to maintain and grow its market share despite strong competition from online rivals and other deep discounters. Recently, RBC (Royal Bank of Canada) increased its price target for Walmart stock to $109 per share from $106.

What Analysts Suggest for Walmart Stock

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Walmart’s top line is expected to grow with improving comps (comparables) across all its business segments. Its continued price investments are drawing value-driven shoppers to its stores. Its focus on merchandising and fresh offerings through SKU (stock keeping unit) rationalization and supply-chain reinvention remains a positive. The company’s e-commerce business remains strong and continues to drive comps higher, largely due to its shopper-friendly initiatives such as online grocery pickup services, fast delivery, and pickup discounts.

The company has managed to improve its EPS (earnings per share) over the past three quarters, despite significant pressure on margins due to its investments in growth measures. Increased competition from Amazon (AMZN) and other deep discounters and business reinvestments needed to support its e-commerce business could continue to pressure its profitability.

Ratings and target prices

About 48% of the 33 analysts covering Walmart stock have recommended a “buy” for the stock, and 52% have recommended a “hold.” Analysts have a price target of $107.17 per share on WMT stock, which implies an upside of 7.7% to its closing pricing of $99.55 on February 12, 2018.

In comparison, analysts have a positive outlook on Costco (COST) stock and a neutral view on Target (TGT).

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