WMT Stock Price: $180 Target By KeyBanc

By Amit Chowdhry ● November 18, 2020
  • Shares of Walmart Inc (NYSE: WMT) have received a price target increase from $155 to $180 by KeyBanc. These are the details.

Shares of Walmart Inc (NYSE: WMT) have received a price target increase from $155 to $180 by KeyBanc. And KeyBanc analyst Edward Yruma is maintaining an “Overweight” rating on the shares. Yruma cited Walmart’s Q3 results and pointed out that omnichannel investments will accelerate the company in the long run. 

Walmart beat Wall Street expectations upon reporting the third-quarter earnings on Tuesday — which was largely spurred by the company’s U.S. e-commerce sales increasing by 79%. As the holiday shopping season begins, consumers have largely started buying products online, picking up purchases curbside, and ordering groceries to their door. And Walmart CEO Doug McMillon noted that the popularity of online shopping services is not slowing down anytime soon. 

“We’re convinced that most of the behavior change will persist beyond the pandemic and that our combination of strong stores and emerging digital capabilities will be a winning formula,” said McMillon during an earnings calls. “Customers will want to be served in a variety of ways and we’re positioned to save them money, provide the variety of product choices they’re looking for, and deliver the experience they choose in the moment.”

The quarter would have been stronger, but the company experienced a softer back-to-school season and a slowdown in spending due to less government stimulus benefits compared to the first half of the year. McMillon is urging elected officials to work on helping small businesses going forward.

In terms of the numbers, Walmart reported earnings of $1.34 per share compared to expectations being below $1.20. And revenue for the quarter was $134.7 billion compared to $128 billion in the same period a year earlier, which beat expectations by a few billion dollars.

Net income for the quarter increased to $5.14 billion compared to $3.29 billion during the same period a year earlier. 

Walmart subsidiary Sam’s Club reported a strong quarter as same-store sales increased by around 11% excluding fuel. And e-commerce sales for Sam’s Club increased by 41%.

International business for Walmart increased at a slower rate. The net sales for the third-quarter increased by 1.3% to $29.6 billion. And Walmart’s Indian e-commerce retailer Flipkart saw a record number of monthly active customers.

COVID-19 added around $600 million in incremental expenses for the third quarter, but that was partially offset by a noncash impairment charge in the same quarter a year ago.

Walmart has hired over half a million new employees this year. And Walmart Chief Financial Officer Brett Biggs pointed out that the shift in purchasing patterns at the state of pandemic led to 3-5 years of acceleration in e-commerce in a “period of weeks and months.”

For customers who prefer to shop inside of stores, the company has resumed the counting and restriction of customers in the store in order to avoid capacity limits.

Disclosure: I have a small WMT position in my stock portfolio.