Analyst Predicts Major Turning Point for Walmart with Automation and Data Capabilities

Roth MKM's Bill Kirk raised their price target on Walmart (NYSE: WMT) by 5.9% from $169 to $179 on 2023/08/18. The analyst maintained their Strong Buy rating on the stock.

According to Kirk, Walmart's second-quarter results for 2024, which were released on August 17, showed significant growth in comparable sales and e-commerce. "Walmart's Q2 2024 results showed comps and e-commerce growth of 6.3% and 24%, respectively," Kirk highlighted.

Furthermore, the analyst believes that Walmart is on the verge of a major turning point, driven by opportunities in automation, data capabilities, and its consumer proposition. Kirk stated, "the company is on the precipice of a major inflection with its automatization opportunities, data capabilities, and consumer proposition."

Roth MKM's view is that Walmart should experience both market share gains and increased profitability as a result of these factors. "Walmart should enjoy the rare combination of market share gains and increased profitability," the analyst said.

In Walmart's second-quarter 2024 earnings report, they reported earnings per share (EPS) of $1.84, beating the Zacks Consensus Estimate of $1.69 and surpassing the $1.77 EPS from the same quarter in 2023 by 4%. Additionally, Walmart's revenue for the quarter was $161.6 billion, beating the Zacks Consensus Estimate of $159.8 billion and exceeding the revenue of $152.9 billion from the second quarter of 2023 by 5.7%.

Looking ahead, Walmart's management provided guidance for the third quarter and the full fiscal year 2024. For the third quarter, they anticipate revenue growth of 3% on a constant currency basis and an EPS of $1.45 to $1.50. For the full fiscal year 2024, Walmart expects revenue growth of 4% to 4.5% on a constant currency basis, up from the previous guidance of 3.5%. They also revised their EPS guidance to $6.36 to $6.46, up from the previous range of $6.10 to $6.20.

Doug McMillon, President and CEO of Walmart, expressed optimism about the company's performance. He highlighted the importance of value and convenience to customers and mentioned the growth in e-commerce, which increased by 24% globally. McMillon also noted positive results in general merchandise and expressed confidence in Walmart's inventory position for the remainder of the year.

In addition to Roth MKM's rating update, other analysts also revised their price targets for Walmart on August 18, 2023. Bobby Griffin from Raymond James raised their price target by 6.3% to $160 and maintained a Buy rating. Scot Ciccarelli from Truist Securities increased their price target by 1.2% to $166 and maintained a Hold rating. Dean Rosenblum from Bernstein raised their price target by 3.8% to $159 and also maintained a Hold rating.

Overall, 84.2% of top-rated analysts currently rate Walmart as a Strong Buy or Buy, while 15.8% consider it a Hold. No analysts recommend or strongly recommend selling the stock.

Analysts forecast that Walmart will deliver earnings per share (EPS) of $5.08 in the upcoming year. If these predictions hold true, Walmart's next yearly EPS will increase by 22.5% compared to the previous year.

Year-over-year, Walmart's stock has risen by 11.6%, outperforming the S&P 500, which has increased by 2.2% during the same period.

It is worth noting that Roth MKM analyst Bill Kirk is ranked in the bottom 8% of Wall Street analysts by WallStreetZen, with an average return of -7.5% and a 47.8% win rate. Kirk specializes in the Consumer Defensive, Consumer Cyclical, and Healthcare sectors.

Walmart Incorporated operates various retail, wholesale, and other units both in the United States and internationally. The company's operations are divided into three segments: Walmart U.S., Walmart International, and Sam's Club. Walmart operates a wide range of stores, including supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, discount stores, membership-only warehouse clubs, and e-commerce websites. The company was founded in 1945 and has its headquarters in Bentonville, AR.

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