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A Modern Retail Winner: Wall Street Bullish On Walmart Following Big Q1

Walmart Inc (NYSE: WMT) shares are ticking higher after falling Tuesday following the retail giant's better-than-expected earnings numbers amid the COVID-19 crisis.

Benzinga · 05/20/2020 15:39

Walmart Inc (NYSE: WMT) shares are ticking higher after falling Tuesday following the retail giant's better-than-expected earnings numbers amid the COVID-19 crisis.

Walmart reported 74% online sales growth and 10% same-store sales growth in the first quarter. Walmart also reported EPS of $1.18 on revenue of $134.6 billion. Both numbers topped consensus analyst estimates of $1.12 and $132.8 billion, respectively.

Walmart also said it's winding down online shopping platform Jet.com, which it purchased in 2016 for $3.3 billion.

Several analysts have weighed in on Walmart stock since the impressive report.

Stellar Execution

Bank of America analyst Robert Ohmes said Walmart’s stellar e-commerce growth was most impressive.

“WMT's focus has shifted to Pick-up & Delivery instead of just online grocery, by increasing the number of general merchandise items available for pickup and merging WMT’s grocery & general merchandise mobile apps into one shopping experience,” Ohmes wrote in a note.

Wells Fargo analyst Edward Kelly said Walmart’s execution has been stellar, but the stock has limited upside from its current level.

“WMT is a good story overall, but the stock’s valuation is as expensive as it’s been in a long time and earnings upside at the moment seems to be extremely limited,” Kelly wrote.

Modern Retail Winner

Cowen analyst Oliver Chen said Walmart’s pickup, delivery and supply chain advantages were clear in the first quarter.

“WMT [is] well positioned to grow market share as early investments in curbside & delivery are resonating with shoppers as new customers increased 4x since mid-March,” Chen wrote.

KeyBanc analyst Edward Yruma said Walmart’s first-quarter results are proof the company’s heavy investments announced back in 2015 are paying off in a big way.

“We think investments in both people and creating a seamless omnichannel experience are differentiating WMT vs. its peers and feel confident about its LT trajectory,” Yruma wrote.

Raymond James analyst Bobby Griffin said Walmart is clearly a winner in the modern-day retail space.

“In today’s retail environment, there are only a few retailers that are driving y/y increases in customer traffic (in store and online) and even fewer that can likely maintain those traffic gains in a higher unemployment environment,” Griffin wrote.

Ratings And Price Targets

  • Bank of America has a Buy rating and $150 target.
  • Wells Fargo has an Equal-Weight rating and $120 target.
  • Cowen has an Outperform rating and $145 target.
  • KeyBanc has an Overweight rating and $138 target.
  • Raymond James has an Outperform rating and $135 target.

Walmart's strock traded around $126 per share at time of publication

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Walmart Reports Q1 Earnings Beat, E-Commerce Sales Increase By 74%

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