On Thursday, BofA Securities adjusted its outlook on Walmart Inc. (NYSE:) and raised the stock’s price target from $75.00 to $85.00 while maintaining a “Buy” rating. The decision comes as the company recognizes Walmart’s potential for long-term profitability improvements, particularly through the growth of its high-margin digital advertising and third-party marketplace (3P) seller fees.
The revised price target is based on 32 times forecast adjusted earnings per share (EPS) of $2.65 for fiscal 2026, a slight increase of 5 cents from previous estimates.
Previously, the valuation was 29 times forward earnings. BofA Securities highlights the strategic investments Walmart has made in its supply chain, automation and digital marketplace offerings as key drivers for improving revenue and gross margin.
The BofA Securities analyst cited improvements in Walmart’s e-commerce losses as a factor contributing to the retailer’s promising financial outlook. The integration of digital and physical sales platforms – where customers can shop online and avail in-store services – is seen as a strategic move that supports revenue and margin growth.
Walmart’s ongoing efforts to improve its supply chain and automation capabilities should also increase its operational efficiency. These improvements, coupled with the expansion of its digital and 3P marketplace offerings, should create further upside for the company’s revenue and gross margins.
By maintaining the Buy rating, BofA Securities reiterates its positive stance on Walmart shares, reflecting confidence in the company’s ability to capitalize on its investments and increase profitability over the long term. The revision of the price target to $85.00 underscores the firm’s belief in Walmart’s strategic initiatives and their expected contribution to the company’s financial performance in the coming years.
In other recent news, Walmart Inc. reported a rise in its shares after revising its sales and profit forecasts for the year upward. The company’s second-quarter earnings beat expectations, with earnings of 67 cents per share and revenue rising 4.8% to $169.3 billion. The company also reported a 22% increase in online sales in the U.S., a key growth driver for Walmart.
Financial institutions Citi, DA Davidson and CFRA have maintained their positive ratings on Walmart, with Citi and DA Davidson reiterating a buy rating and a price target of $75.00. Stifel has also maintained a hold rating on Walmart shares, with a stable price target of $73.00.
Walmart’s board has welcomed Bob Moritz, former chairman of PricewaterhouseCoopers, who will serve on both the audit committee and the technology and e-commerce committee. In light of economic uncertainty and possible strikes, Walmart has adjusted its holiday offerings and is cutting jobs at its headquarters.
Walmart’s success has been attributed to strategic investments in pricing, store quality, technology and supply chain that have enabled the company to outperform competitors and gain market share. These recent developments reflect the company’s resilience and strategic planning in the face of potential economic challenges.
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