4 Walmart Analysts Raise Price Targets After Q2 Earnings Beat: ‘Leader and Market Share Gainer’

A sign is posted in front of a Walmart store in American Canyon, Calif., on Nov. 16, 2021. Justin Sullivan/Getty Images

Walmart Inc. reported impressive second-quarter earnings growth and reiterated its full-year guidance.

On Tuesday, Walmart reported second-quarter adjusted EPS of $1.77 on revenue of $152.8 billion. Both numbers exceeded consensus analyst estimates of $1.62 and $150.8 billion, respectively. Revenue was up 8 percent from a year ago.

Walmart reported 6.5 percent U.S. same-store sales growth, excluding fuel, beating analyst expectations of 5.9 percent growth. Walmart’s e-commerce sales were up 12 percent.

Looking ahead, Walmart reiterated its previous guidance for full-year U.S. same-store sales growth of 4 percent and a full-year EPS decline of between 9 percent and 11 percent.

Bullish Momentum

Credit Suisse analyst Robert Moscow said Walmart management’s commentary that conditions improved in the last two weeks of the quarter bodes well for the second half of 2022.

“We are keeping out 2H intact to reflect the volatile consumer environment, but we think the company has effectively de-risked the rest of the year with a conservative guide,” Moscow wrote.

RBC analyst Steven Shemesh said Walmart’s quarter was better than feared, and the stock remains a relative safety play.

“We’re encouraged by the company’s progress clearing excess inventory, but think it’s important to recognize that the consumer backdrop is still very uncertain,” Shemesh wrote.

Value Proposition

Raymond James analyst Bobby Griffin said Walmart will continue to battle macroeconomic uncertainty and inflation pressures in the second half of the year.

“While near-term results will remain challenging, we believe Walmart’s value proposition (now gaining incremental traffic from upper/middle income consumers) alongside best-in-class omni-channel capabilities, financial strength and leadership leave it well positioned for better performance in the coming quarters/next fiscal year (less markdown exposure and further market share gains in consumables),” Griffin wrote.

Telsey Advisory Group analyst Joseph Feldman said Walmart will remain a “leader and market share gainer” in the retail sector.

“We also are encouraged to see Walmart expand its vision beyond retail and e-commerce, with a focus on building a powerful ecosystem, including advertising, merchant services, last-mile delivery, health services, and digital payments,” Feldman wrote

Walmart Ratings, Price Targets

Credit Suisse has an Outperform rating and raised the price target from $133 to $145.

RBC has an Outperform rating and raised the price target from $135 to $151.

Raymond James has an Outperform rating and lifted the price target from $140 to $150.

Telsey Advisory Group has an Outperform rating and raised the price target from $145 to $160.

By Wayne Duggan

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