An unexpected deal arose for retail giant Walmart (WMT), who sold off its advanced systems and robotics operations to Symbotic (SYM). The deal represents a hefty slug of cash, now and in the future, but investors were less than pleased. They sent shares slipping fractionally in Thursday afternoon’s trading following the announcement.
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A report from the Wall Street Journal noted that Symbotic agreed to buy in, and paid Walmart $200 million in cash up front. It also agreed to as much as $350 million in future payments, setting up a commercial agreement with the retailer.
Symbotic will now be tasked with developing, building, and ultimately installing a complete automated system for online pickup and delivery orders at Walmart stores, the report noted. Walmart already has a range of such systems in place, but Symbotic will be adding its own robotics platform, supported by artificial intelligence, to make the process faster, smoother, and ultimately more effective.
Turns Out They Want the DEI Back
In an even more unexpected twist, some Walmart investors are pushing back on Walmart’s recent move to drop diversity, equity and inclusion (DEI) measures. The group includes, a Bloomberg report noted, “more than 30 shareholders.” This may not sound like much, but this group apparently represents $266 billion in shares held in various funds. Said group called the decision “disheartening.”
The investors in question are asking to speak to senior leadership about the move, and noted that, prior to this report, they had “…spent three decades highlighting the risks associated with discrimination and inequities to Walmart’s leadership.” But with conservative coalitions of investors looking to lend their support to similarly conservative operations, Walmart may be on the horns of a dilemma.
Is Walmart Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Strong Buy consensus rating on WMT stock based on 26 Buys and two Holds assigned in the past three months, as indicated by the graphic below. After a 71.71% rally in its share price over the past year, the average WMT price target of $99.56 per share implies 9.13% upside potential.
