5 Walmart Analysts On Q4 Earnings: Why Retailer Is 'Well-Positioned' In Uncertain Environment

Walmart Inc WMT Tuesday reported higher-than-expected sales growth for its fourth quarter, but issued guidance that fell short of expectations. Here's what the Street has to say. 

Bernstein On Walmart

Analyst Dean Rosenblum maintained a Market Perform rating and $159 price target. 

“Total revenue of $164b up 7.3%, 300 bps ahead of Cons, with strength in stores and eCommerce across all segments, especially in Grocery,” Rosenblum wrote in a note.

“WMT US grocery comp was driven by elevated food inflation similar to Q3 levels (+mid-teens) and an increase in food volume sold YoY,” he added.

“Though EBIT margin of 3.4% came in 40 bps below Cons, Q4 Adj. EPS of $1.71 came in 20c ahead of the Street as a result of strong topline results,” the analyst further mentioned.

Telsey Group On Walmart

Analyst Joseph Feldman reiterated an Outperform rating while reducing the price target from $165 to $160.

Walmart’s solid quarterly results reflected “strong execution and market share gains in the 2022 holiday season,” Feldman said.

“In our view, Walmart’s 2023 guidance, especially our Walmart US 2H23 comp projection, could prove slightly conservative, given the potential for economic improvement as the year progresses, higher (and sticky) inflation in grocery, the return of select general merchandise categories (and higher margins), lower supply chain costs, and strong digital capabilities, partly offset by lapping the robust grocery comp from 2022,” he added.

KeyBanc Capital Markets On Walmart

Analyst Bradley Thomas reaffirmed an Outperform rating and $165 price target.

“WMT’s 4Q EPS and comps were above consensus, with strong Walmart U.S. comps of +8.3%, as WMT continues to gain share in grocery,” Thomas wrote.

“While 1Q and 2023 guidance were below Street expectations, we believe guidance has an appropriate degree of macroeconomic uncertainty baked in,” he added.

Check out other analyst stock ratings.

Oppenheimer On Walmart

Analyst Rupesh Parikh reiterated an Outperform rating and $160 price target.

“We view the underlying health of the business as stronger than what we envisioned pre-print with larger share gains in grocery, healthy momentum from alternative revenue streams, and more discipline on the capex front,” Parikh said in a note.

“We view management guidance for a +2-2.5% WMT US comp (ex. fuel) as conservative amidst our expectations for stronger levels of food inflation, the potential for ongoing share gains, and high-single-digit comp momentum exiting FY22 (Jan. 2023),” he added.

Raymond James On Walmart

Analyst Bobby Griffin maintained an Outperform rating and $160 price target.

“We believe the next couple of quarters will continue to exhibit pressure on discretionary general merchandise purchases (trend across retail), given lingering macro uncertainty and inflationary pressures to consumer spending,” Griffin wrote in a note.

“While the backdrop is admittedly a challenging operating environment, Walmart’s F4Q23 results give credence to our view that the company’s value proposition (gaining incremental traffic from upper/middle income consumers), alongside best-in-class omni-channel capabilities, financial strength and leadership leave it well positioned to continue to gain market share,” he added.

WMT Price Action: Shares of Walmart were trading down 1.99% at $144.40 Wednesday morning. 

Photo courtesy of Walmart.