Walmart (WMT) PT Raised to $196 at Tigress Financial Partners

Tigress Financial Partners analyst Ivan Feinseth raised the price target on Walmart (NYSE: WMT) to $196.00 while maintaining a Buy rating.

The analyst comments "We reiterate our Buy rating on WMT and increase our 12-month target price to $196 as it continues to grow revenue and gain market share driven by its value, convenience, expanding grocery offerings, ongoing digital initiatives, and expanding omnichannel shopping model. WMT continues to benefit from consumers pursuing value pricing on food and personal care products along with its ongoing technological advancements that improve the consumer shopping experience and enhance its value proposition. WMT recently reported strong Q2 results, once again driven by the growth of its omnichannel model, driving strength across all segments and strong comp sales globally, including a 6.4% increase for Walmart U.S. Q2 revenue increased 5.7% Y/Y to $161 billion. e-commerce increased 24% globally, led by pickup & delivery. Walmart U.S. net sales increased 5.7% Y/Y to $110.9 billion, with strength led by grocery and health & wellness, partially offset by modest declines in general merchandise sales. Comp sales excluding fuel increased by 6.4%. Transactions increased by 2.9%, and Average ticket increased by 3.4%. e-commerce contributed 230bps in comp sales and grew 24% Y/Y with strength in pickup & delivery and advertising. Walmart Connect advertising sales increased by 36%. WMT gained market share in grocery driven by strong unit growth. Walmart International net sales increased 13.3% to $27.6 billion. Net sales in constant currency increased 11.0% to $27.0 billion, driven by strong performance from Walmex, China, and Flipkart and positive traffic across all markets. e-commerce sales increased 26%, driven by strength in store-fulfilled sales. Advertising increased by 40%. Sam’s Club U.S. net sales declined 0.3% Y/Y to $21.8 billion. Net sales, excluding fuel, increased 5.3% to $18.9 billion. Comp sales excluding fuel increased by 5.5%, led by food & consumables, healthcare, and positive overall unit growth. Transactions increased by 2.9%, and average ticket increased by 2.5%. Membership income increased by 7.0%, driven by continued strength in Walmart+ member growth and renewals. Membership count grew mid-single digits, Walmart+ penetration increased by 130bps Y/Y, and Advertising increased by 33%. WMT’s accelerating growth flywheel driven by expanding product availability and increasing customer value proposition, as well as expansion into growing business lines including Health & Wellness and Financial Services as well as leveraging its B2B assets, will continue to drive accelerating Business Performance trends, sequential gains in Return on Capital, increasing Economic Profit and greater shareholder value creation. We believe further upside exists, and our 12-month target price of $196 represents a total return with dividends of over 20% from current levels."

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