Walmart stock price rises, analysts raise target price due to strong growth in digital business

Investing.com – Walmart received multiple analyst upgrades on Monday, with analysts citing the company’s digital business expansion and margin improvement potential as key drivers of sustained growth.

Evercore raised its target price from $130 to $153 while maintaining an Outperform rating. The firm noted that Walmart’s digital sales grew 27%, reaching approximately $100 billion in the U.S. and $150 billion globally, suggesting that the company’s 6% EPS growth guidance may be too conservative.

Analysts pointed out that high-margin segments such as advertising, membership fees, and digital services are growing faster, with variable profit margins in these areas reaching double digits. This should help Walmart maintain growth even as other retailers face challenges. Q4 results showed a 2.6% acceleration in traffic, a 4.6% increase in U.S. comparable sales, with e-commerce contributing over 500 basis points, and global operating profit margins expanding by 10 basis points.

Evercore emphasized that Walmart Plus members currently cover about 20 million households, comparable to Amazon Prime’s level in 2014. The firm raised its base case target price from $130 to $135, citing favorable business mix, including a $6.4 billion global advertising business growing 30%, and Walmart Plus market fulfillment revenue increasing to $4.3 billion, achieving double-digit growth.

The firm lowered its EPS estimates by 1% to $3.00 and $3.35 respectively, to reflect liability claims, lower other income, and grocery price investments. Evercore canceled its tactical overweight position announced on February 17, after the stock fell 7%, while the S&P 500 rose 1%.

Barclays maintained an Overweight rating and raised its target price from $125 to $132. The firm noted that aggressive pricing investments drove strong unit share growth, e-commerce penetration accelerated (including WMT Connect growth), and robust underlying traffic, masked by tariffs, is expected to compare favorably in the coming months.

Barclays stated that guidance of $2.96 per share was in line with expectations but believes full-year EPS could reach $3.15 or higher, with management still aiming for stronger traffic growth.

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