Benzinga - by Priya Nigam, Benzinga Staff Writer.
Shares of Walmart Inc (NYSE:WMT) reported better-than-expected results for its first quarter.
The results came amid an exciting earnings season. Here are some key analyst takeaways.
- Bank of America analyst Robert Ohmes maintained a Buy rating, while raising the price target from $67 to $75.
- KeyBanc Capital Markets analyst Bradley Thomas reiterated an Overweight rating, while lifting the price target from $63 to $75.
- BMO Capital Markets analyst Kelly Bania reaffirmed an Outperform rating, while raising the price target from $65 to $75.
- Telsey analyst Joseph Feldman reiterated an Outperform rating, while raising the price target from $68 to $70.
- Roth Capital Partners analyst Bill Kirk maintained a Buy rating, while lifting the price target from $69 to $71.
- JPMorgan analyst Christopher Horvers reaffirmed a Neutral rating on the stock.
BofA Securities: Walmart has momentum "across all income cohorts."
"Delivery is now larger than pickup for WMT and store-fulfilled ecommerce is seeing the strongest growth and is now half of WMT’s ecommerce business," Ohmes added.
"Store remodels (on track for 900+ in F25), online SKU expansion (now 420mn vs. 400mn last year) and express delivery capabilities (3 hours or less) are driving broad-based transaction/unit strength & participation in WMT+ (even from lower income consumers)," the analyst wrote. The company's margins could continue to expand with rising contributions from higher-margin profit streams, including digital advertising, 3P marketplace and fulfillment services.
KeyBanc Capital Markets: "Walmart’s 1Q points to strong execution, continued market share gains, and an increasing benefit from its higher-margin, higher-growth initiatives," Thomas wrote in a note.
The company reported earnings of 60 cents per share, surpassing consensus of 52 cents per share, with the upside being largely driven by stronger revenues and gross margin, he added.
"The growth initiatives of President and CEO Doug McMillon are hitting stride, and will grow even more important (both financially and strategically) in the years ahead," the analyst stated. Walmart has a "favorable outlook" for the short, medium, and long term, he added.
BMO Capital Markets: Walmart's all three business segments performed better than expected, Bania said.
"Management commentary and disclosures provided further evidence that momentum may continue including improving Ecommerce losses, strong gross margins and price positioning, general merchandise units outpacing sales, and more," he added.
"We believe investors will continue to give WMT credit for the significant moat being created by omni-channel investments and high-margin initiatives," the analyst added.
Roth Capital Partners: Walmart reported net sales of $161.5 billion, higher than consensus of $159.6 billion, with US comps excluding fuel of 3.9%, better than the Street's 3.5%, Kirk said.
The combination of a digital presence and a growing ad business is "dramatically separating Walmart from traditional brick & mortar competitors," he added.
"Walmart’s model is inflecting toward a more profitable, less volatile, wider-reaching ecosystem," the analyst wrote. He further stated that the company is well positioned to "attack market share," given its ad opportunity and costs savings via automation.
Telsey Advisory Group: Walmart's market share gains are "driven by its omnichannel model and excellent execution," Feldman said. The company's earnings beat was reflected strong sales growth of 6% and operating margin expansion of 30 basis points (bps), he added.
Walmart's U.S. trends were impressive, with 3.8% comps and traffic up 3.8% and e-commerce up 22%. Gross margin expansion of 46 bps and a 4.2% decline in inventory, the analyst stated.
The solid results and raised guidance reflect that the company's business momentum "remains strong," he added.
JPMorgan: Walmart's earnings were 15% higher than the consensus, driven by a strong margin performance and good US comps, Horvers said. He added, however, that the full-year guidance was raised only to reflect the first-quarter upside.
"More specifically, US comps of 3.8% came in 20 bps above the Street's +3.6%, 30 bps below our raised-into-the-print +4.1%, and perhaps a titch below our previewed buyside expectations," the analyst further wrote.
WMT Price Action: Shares of Walmart had risen by 0.62% to $64.41 at the time of publication on Friday.
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Latest Ratings for WMT
| Feb 2022 | Morgan Stanley | Maintains | Overweight | |
| Feb 2022 | Raymond James | Maintains | Outperform | |
| Feb 2022 | Deutsche Bank | Maintains | Buy |
View the Latest Analyst Ratings
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