There is nothing new in saying that retail giant Walmart (WMT) has always had it in for Costco (COST), and Walmart has been putting a lot behind its Sam’s Club imprint in a bid to take it on. But new reports suggest that Walmart is ramping up its efforts to push Costco off the bulk shopping throne, an ambitious move that investors were glad to see. Shares of Walmart gained modestly in Monday afternoon’s trading on the news.
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Certainly, Walmart has long been a popular target for budget-minded shoppers, which most are these days, thanks to the soaring, crippling inflation that we have seen over the last couple of years. But Costco has also proven a great buying point for bargain shoppers as they pick up several weeks’ worth of groceries from one trip.
And this is where Sam’s Club comes in. Sam’s Club, according to the latest earnings report, gained 7%, which is nearly double the percentage gains seen during the same time in 2023, with a 3.8% gain. In fact, Sam’s Club now represents the third largest segment of Walmart behind Walmart proper and the Walmart international operations. And Sam’s Club is looking to improve on that with surging technology, including the new Scan and Go system that allows shoppers to serve as their own check-out stand, scanning barcodes and paying for items as they go.
A Win at Yahoo Finance
Meanwhile, Walmart also landed a bit of press accolade, as it was declared the 2024 Yahoo Finance Company of the Year. Walmart’s rapid investment in new technology gave it a lot of support, and the fact that it has posted around four quarters’ worth of record earnings growth certainly did not hurt matters either.
It also did not hurt matters that Walmart has consistently outperformed competitors in the sector like Target (TGT), and that share prices hit records this year. Certainly, controversies have struck—like its recent move to pull back on diversity, equity, and inclusion (DEI) operations—but for the most part, Walmart is at peak form in an environment where Walmart should be at its best anyway.
Is Walmart Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on WMT stock based on 26 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After an 86.77% rally in its share price over the past year, the average WMT price target of $97.34 per share implies 2% upside potential.
