Analysts adjust Walmart stock price target after management meeting

If you’re a fan of frozen drinks and Drew Barrymore, Walmart (WMT) has exactly what you need.

The world’s largest retailer is offering Drew Barrymore’s Slush Crush for $89 and is inviting shoppers to “sit back, relax and enjoy restaurant-quality frozen beverages.”

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And while you enjoy those cold drinks, you can relax in the Cobizi hardtop gazebo, which Walmart is selling for $709, a whopping $1,790 off the regular price.

The gazebo handle, by the way, comes from an 18th-century joke word combining “gaze” with the Latin suffix ebo, which means “I will do,” and if you buy this thing, you’ll be the envy of all your neighbors…maybe.

Walmart recently released its first annual report on the state of adaptive retail, which the company describes as “an evolved form of retail that empowers customers to shop exactly the way they want and need.”

“Retailers must anticipate consumer needs, reduce decision-making and enable highly personalized experiences,” Suresh Kumar, Walmart’s global chief technology officer and chief development officer, said in a statement. “The future success of retail depends on our ability to anticipate and meet these evolving expectations.”

Walmart said it surveyed more than 2,200 U.S. shoppers to gauge their current and future expectations.

“Adaptability, instant accessibility and personalized ‘do it for me’ experiences will no longer be luxuries; they will be absolute necessities,” the company said.

Doug McMillon, CEO of Walmart Inc., speaks at the CES 2024 event in Las Vegas, Nevada, U.S., on Tuesday, Jan. 9, 2024.

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Walmart CEO cites generative AI

Richard Kowalski, senior director of business intelligence at the Consumer Technology Association, who reviewed the study, said: “Technological advances such as augmented reality and artificial intelligence are transforming the way consumers interact with retailers.”

“Retailers that use technology to offer consumers more personalized shopping journeys that fit seamlessly into their lifestyles are the ones who will win in this era of adaptive retail,” he said.

Related: Analysts Adjust Walmart Stock Price Target After Shareholders Meeting

Technology is playing a growing role in the retail industry. A report from investment bank Cascadia Capital reveals that the retail technology market reached $19.1 billion in 2022 and is expected to reach $47.8 billion by 2030.

“Retailers are leveraging AI-powered tools and virtual shopping technologies to transform the retail landscape, delivering hyper-personalized, interactive and immersive shopping experiences while simultaneously improving customer service and gaining insights into customer behavior,” the study said.

CEO Doug McMillon told analysts in May that Walmart is “bringing to life new experiences like AI-driven generative product search that helps our customers shop more intuitively.”

“The team continues to build and improve the market and data platforms we use across countries, and they are building and improving the operating system that enables us to create a smarter, more flexible and more automated supply chain,” he said.

During this first quarter, Walmart reported an adjusted first-quarter profit of 62 cents per share, up 26.5% from the same period a year earlier and above Wall Street’s forecast of 52 cents per share.

Revenue rose 6% to $161.5 billion, beating analysts’ estimate of $159.5 billion.

Analyst: Walmart ‘continues to leverage technology’

U.S. comparable-store sales rose 3.8%, beating the 3.2% forecast by Wall Street, while U.S. online sales rose 22% from a year earlier and accounted for a record 20% of all domestic revenue.

Walmart is expected to report quarterly results next month, and several analysts have recently adjusted their price targets for the company.

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On July 25, BMO Capital raised its price target on Walmart stock from $75 to $80 and maintained an Outperform rating on the stock.

The company’s valuation can continue to rise as it demonstrates the sustainability and consistency of its earnings algorithm in the coming years after nearly a decade of investments to achieve this margin inflection, the company said, citing a recent investor meeting with Walmart management.

Two days earlier, Tigress Financial analyst Ivan Feinseth raised the company’s price target on Walmart from $75 to $86 and kept a buy rating on the stock.

Walmart continues to leverage technology and improve operational and execution excellence to gain market share and penetrate higher-income households, Feinseth said. The company’s revised target represents a total dividend return of more than 23% from current levels.

On July 17, KeyBanc raised the company’s price target on Walmart from $75 to $82 and maintained an overweight rating on the stock after holding two days of investor meetings with senior management and investor relations in Bentonville, Arkansas.

The company said it had come away positive from all of the company’s initiatives.

Fundamentally, Walmart continues to gain market share in grocery, e-commerce and general merchandise, while expanding its value proposition across revenue cohorts through its marketplace, delivery and merchandising initiatives, KeyBanc said.

For these reasons, the company said Walmart remains one of its top ideas in the short, medium and long term.

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