Telsey increased its price target for Walmart Inc. to $140 from $135 on Thursday while retaining an Outperform rating, citing a mix of defensive retail positioning and strategic expansion into higher-margin services.
In its rationale, the firm pointed to Walmart's value-priced assortment and customer focus, along with ongoing technology investments that include artificial intelligence. Telsey also emphasized the company's financial flexibility as a factor enabling continued market share gains.
The analyst note drew particular attention to Walmart's development of businesses beyond traditional retail and e-commerce: advertising, merchant services and last-mile delivery. According to Telsey, these newer lines of business carry higher profit margins than core retail operations and should allow Walmart to increase operating income at a faster pace than sales.
Applying a valuation framework, the $140 price target reflects a price-to-earnings multiple of approximately 48 times on a 2026 earnings per share estimate of $2.91. By comparison, the stock currently trades at a P/E ratio of 44.13 and carries a PEG ratio of 2.39. InvestingPro data, cited alongside these metrics, suggests the stock appears overvalued relative to its Fair Value estimate.
Despite the premium valuation signals, Walmart shares have returned 30% over the past year. Telsey's move represents a $5 increase to its 12-month price target from the prior level of $135.
For readers seeking more detailed valuation and growth analysis, the note referenced a comprehensive Pro Research Report available on InvestingPro that covers over 1,400 U.S. equities with expert commentary and data-driven insights.
These analyst updates follow Walmart's release of fourth-quarter 2026 results, which beat expectations on both earnings and revenue. The company posted earnings per share of $0.74, ahead of the $0.73 forecast, and reported revenue of $190.7 billion versus an anticipated $190.4 billion.
Several other brokerages updated their views in the wake of the quarterly report. Bernstein SocGen Group raised its price target for Walmart to $134 from $129 and maintained an Outperform rating, attributing the move to improvements in e-commerce profitability driven by last-mile efficiency and lower fulfillment costs. KeyBanc reiterated an Overweight rating with a $145 price target, highlighting the retailer's strong fourth-quarter showing and market share gains.
At the same time, HSBC took a more cautious stance, downgrading Walmart to a Hold rating from Buy while increasing its price target to $131 from $122. The HSBC analyst pointed to valuation concerns and noted a conservative outlook from the company's new management team, which led to trimmed earnings forecasts in response to guidance that was weaker than expected.
Taken together, the analyst actions reflect a combination of encouraging operational signals and vigilance about valuation and forward guidance. Market participants and investors will likely weigh Walmart's margin expansion initiatives against the premium multiples currently assigned to the shares.