Wal-Mart Stores Inc WMT's aggressive expansion in its online business will likely help continue the company's momentum when second-quarter earnings are announced on Thursday, analysts say.
“While the broader retail backdrop has been choppy, we believe ongoing investments in people (training academies), technology (new tools/apps to help manage inventory/in-stocks), and price are helping WMT gain share,” Baird analyst Peter Benedict said in a note.
He reiterated the firms Outperform rating and $85 price target. He expects earnings of $1.05 per share based on solid operating results.
“We also expect momentum from key omni-channel initiatives (online grocery, free two-day shipping on orders >$35, pickup discounts on non-store items) to continue to build,” he added.
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UBS analyst Michael Lasser thinks a lot of Walmart’s upside is already priced in. He reiterated the firm’s Neutral rating and raised the price target by $4 to $84.
“We expect WMT to issue US comp guidance that's in line with 2Q in the 1.5-2.0% range,” he wrote in a note. “A return to food inflation should help, and will likely become a positive contributor to the comp. So long as WMT continues to show momentum on the eComm front, we think investors will be willing to give it another pass to invest in the business. Thus, flattish 3Q EPS ($0.95-$1.05) would likely be acceptable to the market."
Walmart's stock is up more than 16 percent in 2017, trading around $80 per share.
Related link:
Walmart Once Again Positioned To Take Market Share
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