Stocks have surged in 2024, and the post-election reaction in the first week after the results were known has been remarkable with the Dow, S&P 500 and NASDAQ all hitting new all-time highs. Walmart Inc. (NYSE: WMT) has been a winning company and a winning stock when many other retailers have been facing more consumer spending headwinds. Now the world’s largest retailer has earnings in a week and its stock up 60% so far in 2024 alone. It now also sports a $676 billion market capitalization.
Oggonomics is looking to see if there is any “strategic” trade left in Walmart. Seeing a 60% gain in Walmart in any one-year period is far from the norm. Oggonomics does not have any formal in-house price target or any formal rating for Walmart. What has been noticed is that Wall Street analysts just cannot get enough of Walmart.
With an earnings call on November 19, the current $84.21 share price is just under the Finviz consensus analyst price target of $87.24. Walmart also has a dividend yield of only about 1.3% because its stock price has risen so much in 2024. That was coming off of a longer-term trading range of $40 to $52 for the prior three-year period, but now the stock has doubled from the lower end of that prior trading band. What will Walmart have to do to keep its ever-growing investor base happy after such a strong run?
It would seem that investors will be demanding a classic “beat and raise” quarterly report at next week’s earnings if the ongoing excitement around Walmart’s stock can continue. Oggonomics has tracked multiple firms raising their price targets in the last month. At $84.21, Walmart’s 52-week trading range is $49.85 to $85.54.
THE BIG RECENT CALLS
Walmart was reiterated as Overweight and its price target was raised to $89 from $82 at Morgan Stanley on October 12. The analyst, Simeon Gutman, cited Walmart’s scale and consistency with expanded P/E valuations helping it navigate through current weakness in the consumer. Also noted was Walmart reaching up and grabbing more share from higher income households. Features such as same-day deliveries and its ecommerce expansion are also paying off. Morgan Stanley’s report did warn that “With Big Multiple Expansion Comes Great Responsibility” in its report as it is valued at 31-times earnings and well above its 5-year average valuation. The firm believes WMT can support the current stock levels if it continues to execute on 2 key drivers:
- 1) Its ability to sidestep consumer weakness by gaining share of wallet, especially among high-income households.
- 2) Accelerated growth in high-margin, alternative revenue streams that are funding operating leverage.
Gutman’s ratings come with some alternatives as well. The bullish case is a $116 stock price over time and a bearish case is $65 in the report.
Citigroup reiterated its Buy rating and $98 price target on October 11, after having raised the target from $78 in late-September. Citi has the prized “street-high” analyst price target. The report talked up Walmart winning more share with a best-in-class omnichannel position and it’s the firm’s top pick in the category. The higher-margin growth opportunities and a view that the back-to-school and holiday spending will remain firm for Walmart drove the ratings and its significantly higher-than-average target price.
MORE PRICE TARGET HIKES
Walmart saw its price target raised to $88 from $87 at KeyBanc Capital Markets on November 7, but it had just seen the target raised to $87 from $86 on October 28 and its price target had also been raised to $86 from $82 two weeks before that.
Multiple other price targets have been raised in the last month ahead of earnings as well:
- Wells Fargo reiterated its Overweight rating and raised its target to $90 from $88 on October 31.
- Walmart was reiterated as Buy and its target was raised to $90 from $81 at Guggenheim on October 28.
- Evercore ISI raised its target to $85 from $82 and reiterated its Outperform rating on October 22.
- Walmart was started with an Outperform rating and was assigned a $95 price target at Bernstein on October 22.
- Oppenheimer reiterated its Outperform rating and raised its price target to $90 from $81 on October 14.
- Walmart was reiterated as Buy and its target was raised to $92 from $81 at UBS on October 11.
- BofA Securities reiterated its Buy rating and raised its price objective to $95 from $85 on October 11.
DISCLAIMER
All ratings and price targets have been mentioned on Walmart have been issued by the firms named in this report. Oggonomics has no formal price targets nor any formal rating on Walmart. As such, all investing decisions are up to each investor and the decision to buy, sell, hold or avoid should be made with the help of a financial advisor.
