Walmart's Expanded Vision Beyond Retail In Focus: Analyst Forecasts Higher Profits, Solid Customer Relations
Portfolio Pulse from Nabaparna Bhattacharya
Telsey Advisory Group analyst Joseph Feldman upgraded Walmart Inc. (WMT) to an Outperform rating with a target price of $205, up from $185, citing Walmart's expanded vision beyond retail into advertising, merchant services, and last-mile delivery. Walmart's Q4 FY24 net sales grew by 5.7% to $173.39 billion, surpassing expectations. Adjusted EPS was $1.80, beating the consensus of $1.65. The company's international division saw a 17.6% sales increase, with significant growth in Flipkart and China. Walmart also agreed to acquire VIZIO Holding Corp. (VZIO) for $2.3 billion, a move expected to bolster its advertising growth but be dilutive to 2024 earnings. Feldman maintains a 2024 EPS estimate of $7.13 with a projected total sales growth of 4% to $674 billion.
February 21, 2024 | 7:01 pm
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NEUTRAL IMPACT
Walmart's acquisition of VIZIO for $2.3 billion is expected to enhance its advertising capabilities but may dilute earnings in 2024.
The acquisition of VIZIO by Walmart is a strategic move to enhance its advertising segment. However, the deal's expected dilutive effect on 2024 earnings introduces uncertainty regarding its short-term financial impact.
CONFIDENCE 85
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
Walmart's Outperform rating and target price increase to $205 reflect its strong Q4 performance and strategic expansion beyond traditional retail, which could drive future growth.
The upgrade by Telsey Advisory Group, based on Walmart's Q4 performance and strategic expansions, indicates a positive outlook for the company's stock. The acquisition of VIZIO and growth in advertising and international sales are expected to contribute to Walmart's market share and profitability.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100