Walmart has agreed to sell the majority of its stake in Japanese supermarket Seiyu GK to e-commerce company Rakuten, Inc. and investment firm KKR & Co. Inc. The transaction is expected to be completed in the first quarter of 2021.
Walmart (WMT) disclosed that Rakuten will acquire a 20% stake in Seiyu while KKR will buy 65% in a deal that values the business at 172.5 billion yen ($1.6 billion). The US retail giant will retain a 15% stake in the asset.
CEO of Walmart International, Judith McKenna said, “Today’s announcement is important because its focus is on bringing together the right partners in the right structure to build the strongest possible local business. We look forward to supporting Seiyu’s growth and success, alongside KKR and Rakuten, as a minority investor.” (See WMT stock analysis on TipRanks).
Last week, Jefferies analyst Stephanie Wissink raised the stock’s price target to $170 (12.9% upside potential) from $165 and reiterated a Buy rating amid expectations that the company will report “solid” 3Q results. Wissink’s expects that comparable-store sales (comps) have improved throughout 3Q. The analyst noted that her comps growth estimate of 4.5% for the quarter is pitched above the Street consensus of a 3.8% increase. Walmart is scheduled to report its financial results on Nov. 17.
Currently, the Street has a bullish outlook on the stock. The Strong Buy analyst consensus is based on 21 Buys and 6 Holds. The average price target stands at $150.78 implying that shares are fully priced at current levels. Shares of Walmart are up 26.7% year-to-date.
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