Walmart (NYSE:WMT) may be one of the biggest names in retail around, and its groceries help keep it there. People making the regular run for food keeps them coming in the doors, and Walmart is eager to cement that position. It plans to open five new automated distribution centers in aid of that, but it didn’t help much with shareholders. In fact, Walmart shares lost fractionally in Wednesday afternoon’s trading.
Reports note that the distribution centers will each measure about 700,000 square feet and will include entire areas devoted to cold storage, such as frozen or fresh foods. The move is being done to better keep up with consumer demand, as many consumers got into the habit of ordering groceries for a parking lot pickup or for delivery back during the pandemic and never bothered to get out of it.
Walmart also looks to gain substantial profits from automation; that, along with advertising, is considered one of its “higher-margin” businesses, reports noted, and it’s a major reason why Walmart CEO Doug McMillon expects more rapid growth in profits than in sales for the next five years.
Meanwhile, In Chile…
It’s easy to forget that Walmart is a worldwide operation now, and its Chilean operations are coming under fire. In fact, Chilean Walmart employees, part of a union, just launched a strike after collective bargaining negotiations fell apart.
The Chilean employees claimed that Walmart “had not been negotiating since the start of the process.” Walmart, meanwhile, seemed unfazed; the union requested an extra five days to negotiate, but Walmart refused, apparently inviting a strike. However, Walmart representatives noted that “…we are convinced that we have made every effort to avoid the strike.”
Is Walmart a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Strong Buy consensus rating on WMT stock based on 26 Buys and three Holds assigned in the past three months, as indicated by the graphic below. After a 37.38% rally in its share price over the past year, the average WMT price target of $73.85 per share implies 5.74% upside potential.
