Walmart (NYSE:WMT) is a retail superstar, and analysts are overwhelmingly positive about the company now. I am bullish on WMT stock for a number of reasons. The company pays a decent dividend, its revenue is strong despite the negative pressure of inflation, and Walmart appears to be making headway in the challenging area of e-commerce.
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Walmart is America’s best-known brick-and-mortar retail big-box store chain. However, when it comes to e-commerce, it’s been difficult for Walmart to compete against Amazon (NASDAQ:AMZN).
There’s good news to report for Walmart’s shareholders, though, as the company is doing better in e-commerce than you might expect. Plus, there’s been a big change in the price of Walmart shares, but it’s not a bad thing at all, so stay tuned for the details.
Walmart News Roundup: Stock Split, Dividend Hike, and Earnings Beat
Amazon is a “Magnificent Seven” member, and Walmart isn’t, but Walmart has reported a lot of magnificent news in recent weeks. For one thing, stock traders are chattering about Walmart’s 3-for-1 stock split, which took effect on February 26. This makes WMT stock more accessible, so the stock split might entice more traders to buy Walmart shares.
Second, there’s positive news for passive-income investors. Specifically, Walmart hiked its forward annual dividend by 9% to $0.83 per share. That might not sound like much, but it equates to a dividend of $2.49 per share on a pre-split basis.
Furthermore, Walmart added to its track record of quarterly earnings beats not long ago. The company earned $0.60 per share in the fourth quarter of Fiscal Year 2024, while the consensus forecast called for earnings of $0.55 per share.
There are plenty of encouraging data points in Walmart’s financial report. On a year-over-year basis, Walmart’s revenue grew by 5.7% to $173.4 billion in Q4 FY2024. Also, despite the persistence of inflation, Walmart’s consolidated gross margin rate increased by 39 basis points.
Here’s the real kicker, though. Walmart managed to grow its Global E-Commerce sales by 23%, and the company’s E-Commerce sales surpassed $100 billion for the fiscal year. In other words, it looks like Walmart can improve its standing as an e-commerce competitor despite the constant threat from Amazon.
Analysts Can’t Stop Raising Their Price Targets on Walmart Stock
As we’ll discuss in a moment, analysts generally favor WMT stock, and the majority of them have issued a Buy or equivalent rating on Walmart shares. However, Wall Street’s experts have different reasons for raising their price targets (after adjusting for the stock split).
For instance, we already touched upon Walmart’s progress in E-Commerce sales, and Evercore ISI analyst Greg Melich sees Walmart’s “online business” (according to BYT Team on TipRanks) as being “key to both an acceleration in sales and an expansion in profit margins.” Thus, Melich raised his Walmart stock price target from $182 to $65 (which would have been $195 prior to the stock split).
Meanwhile, RBC Capital raised its price target on WMT stock from $168 to $189 (these are pre-split prices, of course). Apparently, RBC Capital views Walmart’s acquisition of Vizio (NYSE:VZIO) as “complementary to its Walmart Connect strategy” (per TheFly).
Furthermore, Barclays (NYSE:BCS) analysts lifted its price target on Walmart stock from $167 to $180. As TheFly reported, Barclays discerns that Walmart “continues to have more control of its destiny, with strong share gains and unique profit drivers, combined with medium-term optionality in its discretionary business.”
The list goes on and on. Truist analyst Scot Ciccarelli raised his price target on WMT stock from $170 to $179 and remarked that Walmart’s fourth-quarter results “remained strong.” BMO Capital analysts raised their price target on Walmart shares from $190 to a very ambitious pre-split price of $195, observing (per TheFly) that the company “finished a strong year.” Other price-target hikes include ones from Morgan Stanley (NYSE:MS) analyst Simeon Gutman (from $168 to a highly ambitious $200) and Telsey Advisory analysts (from $185 to an eyebrow-raising $205).
Which WMT Stock Analyst Has the Best Track Record?
If you’re wondering which analyst you should follow if you want to buy and sell WMT stock, the most profitable analyst covering the stock (on a one-year timeframe) is Robert Drbul of Guggenheim, with an average return of 16.74% per rating and a 91% success rate. Click on the image below to learn more.
Conclusion: Should You Consider Walmart Stock?
Walmart’s E-Commerce business is doing better than some of the skeptics might expect. Plus, the company’s stock split and dividend hike should make Walmart’s shares more accessible and attractive for investors.
Along with all of that, numerous analysts are raising their price targets on Walmart shares for various reasons. Therefore, it’s easy for me to conclude that WMT stock is an excellent retail stock, and I’m absolutely considering it for a share position.
