Walmart (WMT) was likened to an NFL superteam today following its Q3 earnings results, but it was also warned not to forget its basic retail X’s and O’s.
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Defense and Offense
Oliver Chen, analyst at TD Cowen, punted up his price target on the Walmart stock to $125 from $120 after hailing the “power of the company’s defensive characteristics with its ability to play offense with technology.” As such, it is the number one idea on its conviction list.
The defensive side of the WMT ball refers to its all-around category growth, impressive advertising bounce, delivery momentum and grocery value strength. While the defensive schemes saw US e-commerce bulk-up 28% in the quarter. That is its seventh consecutive quarter of 20% plus growth.
Chen believes that there are more AI innovations ahead for the stock. “We believe agentic will yield what we call P.A.D. Retail or prescriptive, adaptive and do-it-now retail,” Chen said. “This will enable retailers who use this framework correctly to move faster. Further our thematic call is a big shift to prescriptive retail from predictive retail.”
He added that he has previously acknowledged that WMT is an early leader in AI such as its micro-fulfillment technology driving its supply chain and AI driven assortment management.
Customer-Facing AI
“Going forward, we think A.I. will play a role in merchandising, labor, and inventory management as well as before purchase, during purchase, and after purchase occasions. A.I. will also play a key role in store associate training, reinvesting time for more customer-facing duties, and driving new purchasing journeys,” he said.
Alongside its results Walmart announced that due to its technology leanings it was moving its listing from the New York Stock Exchange to the Nasdaq.
According to Danni Hewson, head of financial analysis at AJ Bell this represents the largest defection from the New York Stock Exchange on record and hints at the direction of travel in a world dominated by AI.
“Presumably, management feel that by moving to the home of the world’s leading tech businesses Walmart shares can attract a more generous valuation, although they already trade at a premium to most of the retail peer group,” Hewson said. “It is arguable just to what extent Walmart can play the tech hand. Certainly, the business has significantly expanded its use of technology in recent years to good effect but it remains at heart a simple retailer – albeit one of extraordinary scale and sophistication.”
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 25 Buy ratings. Its highest price target is $129. WMT stock’s consensus price target is $117.71, implying a 9.90% upside.
