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Walmart sought to convince analysts at a day of investors Tuesday.
Luke Sharrett / Bloomberg
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Walmart
(Ticker: WMT) held its annual investor day Tuesday and analysts came out largely optimistic about what they heard.
Where we were Walmart's stock has not changed much in 2018. Investors are wondering whether significant spending in key areas such as online sales will pay off.
Where we are headed: A number of analysts were encouraged by what they heard at the annual event.
Walmart trailed behind the retail sector this year. The stock had a strong outperformance in 2017, but lost strength earlier this year. Concerns about digital sales were at the center of the debate, and investors were less convinced of the benefits of other initiatives, such as taking ownership of the FlipKart in India and developing healthcare.
Nevertheless, the stock has been on the rise in recent months, and is on the rise again Wednesday, as the street digests the event. Walmart reiterated its revenue forecast for the year and said it expected to earn between $ 4.65 and $ 4.80 per share in fiscal 2019, a reduction from previous expectations related to the slowdown initial profits from the FlipKart case. Earnings forecasts by consensus are $ 4.82 per share.
For fiscal year 2020, Walmart expects revenue growth of 3% or more, with comparable US revenue growth of 2.5% to 3% and e-commerce growth of 35%. By excluding FlipKart, Walmart sees BPA FY2020 increasing year on year with a percentage less than 10%. The company also announced that it would launch a specialized automotive store on its website in partnership with
Advance Auto Parts
(PAA).
Analysts intervene in the event and are mostly blocked by their calls upward. Cowen, Oliver Chen, reiterated the Outperform ratings and the $ 115 stock price target, explaining that Walmart is the brand "at the center of a new ecosystem integrating purchasing, services, health and wellness. to be, as well as e-commerce first ie its own website and an online platform offering third party products). He thinks Walmart is seizing the moment to turn itself into an innovator and using its unique asset portfolio. The retailer's new direction "seems achievable and achievable," said Chen.
Christopher Mandeville, of Jefferies, reiterated his goal of buying and his price target of $ 112, stating that the event had shown that Walmart "operated in a disciplined manner and sought a proper balance between short-term results and long-term". its physical and digital strengths to improve customer service, using technology to make its stores more efficient and relying on its strong core business as a stable base while moving into riskier areas.
Joseph Feldman of the group's Telsey Advisory Group reiterated the Outperform ratings and $ 107, noting that this meeting had strengthened his confidence in Walmart's ability to evolve to meet the needs of "the omnichannel retail world of tomorrow." strategic acquisitions and partnerships, as well as its solid execution and balance sheet. All of these factors "should allow Walmart to remain a leader and gain market share," he writes.
You can not please everyone, though. Stifel's Mark Astrachan says the company's momentum is continuing, but macroeconomic uncertainty and pressure on gross margins from ongoing investments leave it on the side. Walmart's shares are currently valued, says Astrachan.
Walmart shares rose 0.5% to $ 96.28 in recent transactions. the
SPDR S & P Retail ETF
(XRT) is down 1.7% to $ 47.55
To make the connection
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Write to Teresa Rivas at [email protected]
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