Walmart Inc. (NYSE: WMT) shares edged higher on Monday, climbing 0.8% to $132.48, as several Wall Street analysts boosted their price targets ahead of the company's fiscal first-quarter earnings report scheduled for Thursday morning. The positive sentiment from analysts underscores the market's focus on the retail giant's ability to sustain growth amid a challenging economic environment.
Evercore ISI raised its price target on Walmart to $140 from $135, maintaining an "outperform" rating. Jefferies followed suit, lifting its target to $150 from $145 while keeping a "buy" recommendation. These moves reflect confidence in Walmart's grocery-focused business, expanding digital sales, and growing advertising segment, which are seen as key drivers to weather pressures from rising fuel and food costs that are affecting many U.S. consumers.
Additional analyst upgrades came from Piper Sandler's Peter Keith, who increased his target to $137 from $130, and Bernstein's Zhihan Ma, who raised his to $145 from $134. UBS analyst Michael Lasser reaffirmed a "buy" rating with a $147 price target, projecting Walmart U.S. comparable sales growth of about 4.5% and a more than 25% jump in e-commerce revenue. The stock has gained approximately 18.8% year-to-date.
Walmart is expected to report adjusted earnings of $0.66 per share on revenue of approximately $174.81 billion, according to analysts surveyed by TipRanks. This forecast slightly exceeds Walmart's own February guidance of adjusted earnings per share between $0.63 and $0.65. Net sales are anticipated to grow 3.5% to 4.5% on a constant currency basis, excluding the impact of foreign exchange fluctuations.
The broader retail landscape provided some context: U.S. retail sales rose 0.5% in April, according to Census Bureau data released last week. However, Reuters noted that part of the increase was likely driven by higher prices rather than increased volume. "The powerful equity market rally is supporting spending on the upper leg of the K-shaped expansion," said Sal Guatieri, senior economist at BMO Capital Markets. He cautioned that lower-income shoppers continue to face elevated costs for fuel, transportation, and food.
Walmart is leveraging its scale, grocery dominance, membership income, advertising business, and faster shipping to maintain margins. In February, the company reported global e-commerce sales surged 24% in the fourth quarter, while its global advertising business grew 37%. Specifically, Walmart Connect sales in the U.S. increased 41%.
Both Amazon and Walmart are intensifying efforts to accelerate online delivery in rural U.S. regions, as reported by Fortune and the Associated Press. Morgan Stanley analysts estimate that annual retail spending in these areas could reach $1 trillion, with about 90% of rural residents living within 10 miles of a Walmart store.
Home Depot is also set to report first-quarter earnings on Tuesday, which may provide insights into consumer spending on home improvement and big-ticket items. Risks remain for Walmart, including higher energy costs, weaker spending from lower-income households, and potential softening in health and wellness demand, which could make it challenging to meet elevated expectations. Reuters cited EY-Parthenon senior economist Lydia Boussour, who noted that more consumers are relying on savings and credit to sustain spending—a trend she views as increasingly difficult to maintain, particularly for lower-income groups.
Despite these headwinds, Walmart remains a bellwether for the retail sector, and Thursday's earnings report will be closely watched to see if the company can justify its recent stock rally.
