Skip to main content
hello world

Paid Post: Content produced by Motley Fool. The Globe and Mail was not involved, and material was not reviewed prior to publication.

Walmart Stock Has 30% Upside, According to 1 Wall Street Analyst

Motley Fool - Tue Feb 27, 4:51AM CST

Walmart(NYSE: WMT) generated quite a splash with several items of news last week. It reported its fourth-quarter and full-year 2023 earnings where the company said its online global fourth-quarter sales grew 23% year over year, surpassing $100 billion for the full year. And the retail giant announced an acquisition that gave investors a peek into its next planned phase of growth.

That led Piper Sandler analyst Edward Yruma to raise his firm's price target on the company to $76 per share (adjusted for Walmart's recent 3-for-1 stock split) while maintaining a "strong buy" recommendation. That bullish price target represents 30% upside for what many might consider a boring, stodgy stock.

E-commerce and advertising

Walmart increased sales, earnings per share, profit margin, and operating income in the fourth quarter and for the full year. But it wasn't just its financial results that led Yruma to boost his firm's price target for the company.

The analyst not only sees Walmart offering customers more value in an environment where some consumers are looking to cut back, but also creating ways to enhance the Walmart shopping experience.

That is based on the company's strong e-commerce growth, but also how it can leverage the just-announced $2.3 billion acquisition of smart TV maker Vizio. Walmart should be able to retain and expand its already large customer base with the acquisition. It provides the retailer access to data and the ability to generate meaningful additional ad revenue going forward.

That business model might sound familiar if you have followed the successful trail that Amazon has blazed. If it's successful, the 23% return from Walmart's stock over the last year will look tame relative to its future prospects.

Walmart also raised its dividend by 9%, marking the largest increase in more than 10 years. That confidence from management only reinforced what many investors gleaned from Walmart's quarterly report and its Vizio acquisition.

Should you invest $1,000 in Walmart right now?

Before you buy stock in Walmart, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Walmart wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than tripled the return of S&P 500 since 2002*.

See the 10 stocks

*Stock Advisor returns as of February 26, 2024

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Howard Smith has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.