Walmart (WMT) stock weakened today despite a leading analyst declaring that its growing advertising business could mean an extra $10 billion a year to invest in the wider business.
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Advertising and Marketplace Surge
Michael Lasser, analyst at UBS, reiterated a Buy rating on Walmart today and his price target of $147. Lasser said the Buy rating was down to a combination of factors mainly centered around the grocery company’s fast-growing “second P&L” businesses. This refers to areas such as its marketplace and advertising sections, which he said are still underappreciated by the market.
In its most recent results, WMT said its global advertising business grew 46% to nearly $6.4
billion, with eCommerce sales up 27%, helped by in-store-fulfilled pickup & delivery, advertising and marketplace.
Lasser said that these higher-margin segments can grow at a robust pace for many years, materially reshaping Walmart’s earnings mix and driving enterprise-wide EBIT from roughly $29.5 billion in 2025 to about $53.7 billion by 2030.
Lift Operating Margins
He said that the scale and profitability of these newer revenue streams gives Walmart “meaningful flexibility to both fund additional growth initiatives and steadily lift operating margins over time.” In his base case, he sees room for Walmart to reinvest $8–10 billion of annual profit back into the business through 2030 while still expanding its operating margin toward the mid-6% range by 2030 and potentially around 8% by 2035. This, he said, supported a favorable risk‑reward profile at WMT’s current valuation.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus, based on 28 Buy and 2 Hold ratings. Its highest price target is $150. WMT stock’s consensus price target is $138.81, implying a 6.56% upside.
