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Founded in 1962, Bentonville-based Walmart Inc. (WMT) is the world's largest retail corporation by revenue. With a market cap of $520.9 billion, it operates a chain of hypermarkets, discount stores, and grocery stores. With over 4,600 stores in the U.S. and a fast-growing e-commerce business, Walmart's mix of affordability and variety keeps consumers hooked amid rising prices.
Walmart stock has outperformed the broader market over the last year. WMT has gained 29.7% over this time frame, while the broader S&P 500 Index ($SPX) has rallied nearly 27.5%. In 2024 alone, shares of Walmart rose 23%, surpassing SPX's 11.2% gains on a YTD basis.
Zooming in further, WMT's gain over the past 52 weeks outpaced the Vaneck Retail ETF’s (RTH) 21.5% returns. Even more impressive, the stock's double-digit YTD gain far exceeds the exchange-traded fund's 8.6% return over the same time frame.
Despite hurdles like a shaky spending climate and disruptions from an early Easter, Walmart’s impressive price action relative to the broader indexes in 2024 stems from a solid Q1 earnings report on May 16. Shares hit a record high after raising its full-year forecast, betting on easing inflation to boost grocery and non-essential sales, marking its biggest one-day gain in four years.
Moreover, the big box retailer's $2.3 billion Vizio acquisition, signaled confidence in scaling Vizio's smart TVs for a lucrative advertising venture, enhancing its competitive edge against rivals.
For the current fiscal year, ending in January 2025, analysts expect WMT to report EPS growth of 7.7% year over year to $2.39. The company's earnings surprise history is robust. It beat or matched the consensus estimate in all of the last four quarters.
In the last reported quarter, Walmart beat analysts' estimates for revenue and profit, driven by strong e-commerce gains, growth in new ventures like advertising, and attracting more high-income shoppers.
The consensus view on WMT has been bullish overall. Among the 30 analysts covering WMT stock, the consensus rating is a “Strong Buy.” That’s based on 21 “Strong Buy” ratings, four “Moderate Buys,” and five “Holds.”
This configuration is slightly more bullish than two months before with 20 analysts suggesting a "Strong Buy."
On May 17, Raymond James analyst Bobby Griffin boosted Walmart's price target by 11.1% to $70, while maintaining a “Buy” rating. Griffin praised Walmart's Q1 2025 earnings, highlighting strong performance and a favorable fiscal 2025 outlook. Other analysts followed suit, raising their targets and maintaining positive ratings, underscoring Walmart's momentum in higher-margin businesses.
The mean price target of $65.55 indicates a premium of just 1.4% to WMT’s current price levels. The Street-high price target of $71 suggests an upside potential of 9.8%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
