Analysts increased Walmart's price targets on Monday, highlighting the company's faster-than-expected digital expansion and emerging margin drivers as reasons for a brighter outlook on the stock.
Evercore raised its price target to $153 from $130 while keeping an Outperform rating. The firm pointed to Walmart Digital's reported 27% growth and scale approaching roughly $100 billion in the U.S. and $150 billion globally as signals that the retailer's 6% earnings-per-share growth guidance may be conservative.
Evercore emphasized the potential of higher-margin revenue streams to lift overall profitability. The analyst noted that advertising, membership fees and digital operations are growing faster and carry double-digit variable margins, which should allow Walmart to expand earnings even as other retailers encounter pressures. In the fourth quarter, the company recorded accelerating traffic of 2.6%, U.S. comparable sales of 4.6% with more than 500 basis points attributable to e-commerce, and a 10 basis-point expansion in global operating income margin.
The firm underscored Walmart Plus membership penetration - roughly 20 million households - and likened that scale to where Amazon Prime stood in 2014. Evercore also lifted its base case to $135 from $130, pointing to favorable business mix assumptions: a $6.4 billion global advertising business growing at 30% and double-digit marketplace fulfillment income expansion to $4.3 billion linked to Walmart Plus.
At the same time, Evercore trimmed its earnings-per-share forecasts by about 1% to $3.00 and $3.35, respectively, to reflect liability claims, lower other income and investments in grocery pricing. The firm removed a tactical Underperform allocation it had issued on February 17 after the stock had fallen 7% while the S&P 500 rose 1%.
Barclays also affirmed a constructive stance, maintaining an Overweight rating and raising its price target to $132 from $125. The bank cited strong unit share gains driven by aggressive price investments, accelerating e-commerce penetration including growth in WMT Connect, and underlying flow-through that has in part been obscured by tariffs expected to anniversary in coming months.
Barclays noted that management guidance came in at $2.96 as expected, but the firm sees potential for full-year earnings per share of $3.15 or higher while acknowledging that management is targeting stronger flow-through over time.
These analyst moves reflect a focus on the interplay between scale in digital commerce and margin composition. The firms point to expanding higher-margin services - particularly advertising, membership and marketplace fulfillment - as key offsets to investments and episodic headwinds that have pressured earnings in the near term.