Retail giant Walmart (NYSE:WMT) is eyeing the acquisition of Vizio (NYSE:VZIO), a smart television manufacturer, in a deal valued at approximately $2 billion, the Wall Street Journal reported.
Don't Miss our Black Friday Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Following the news, Vizio stock jumped about 25%, while Walmart stock closed lower by about 1%.
Ad Revenues Carry Higher Margins
Walmart’s advertising arm, Walmart Connect, witnessed an impressive 26% year-over-year growth during the third quarter of Fiscal 2024. Notably, in 2021, the company rebranded Walmart Media Group as Walmart Connect.
Walmart highlighted that this business is experiencing rapid growth and is positioned to emerge as one of the top ten advertising platforms. Further, ad revenues carry higher margins than the grocery business, which will likely cushion its profitability.
The move will likely bolster WMT’s ad revenue. It should strengthen WMT’s competitive positioning against Amazon (NASDAQ:AMZN), which is rapidly growing its ad business.
Is Walmart a Buy or Sell Right Now?
Walmart stock is a Buy right now based on analysts’ consensus ratings. The retailer’s value pricing strategy and omnichannel offerings continue to drive traffic, revenue, and earnings.
WMT stock has received 25 Buys and four Holds for a Strong Buy consensus rating. It has gained about 18% in one year. Analysts’ average price target of $162.94 implies 3.67% downside potential from current levels.
