Strategic Growth and Margin Expansion Drive Buy Rating for Walmart

Analyst Simeon Gutman from Morgan Stanley maintained a Buy rating on Walmart (WMT – Research Report) and keeping the price target at $115.00.

Simeon Gutman has given his Buy rating due to a combination of factors that highlight Walmart’s strategic positioning and growth potential. One key aspect is Walmart’s diverse income streams, which are gaining momentum, including same-day delivery expansion, growth in merchandise sales, and increased advertising income through Walmart Connect. These elements are contributing positively to the company’s operating income.
Gutman also emphasizes the early-stage potential of Walmart’s eCommerce operations, which are showing accelerated sales and higher profit conversion rates. With ongoing investments in warehouse automation and increased utilization of existing assets, Walmart is poised for significant margin expansion. Additionally, the potential for higher retail media income and the strategic use of technology, such as generative AI, further support the company’s growth trajectory. These factors collectively underpin Gutman’s confidence in Walmart’s ability to enhance its profitability and market position, justifying the Buy rating.

In another report released on June 6, Bank of America Securities also maintained a Buy rating on the stock with a $120.00 price target.