Bernstein reiterates Walmart stock Outperform with $108 target

Bernstein reiterated its Outperform rating on Walmart with a $108 price target after Walmart International CEO Kathryn McLay discussed the company's omni-channel strategy and growth targets at a recent conference. Walmart International aims to reach $200 billion in GMV by 2028, focusing on high-growth markets like India, China, and Mexico, while also expanding omni-channel capabilities in Canada and Chile; this follows a strong first quarter where Walmart's e-commerce operations turned profitable and the company exceeded earnings expectations, leading KeyBanc, Raymond James, and Bernstein to maintain positive ratings despite a planned workforce reduction of 1,500 jobs.

Analysis

Bernstein's reaffirmation of an Outperform rating on Walmart Inc. (WMT) with a $108.00 price target underscores confidence in the retailer's strategic direction, particularly following Walmart International CEO Kathryn McLay's articulation of its omni-channel strategy and ambitious growth targets. Walmart International aims to achieve $200 billion in Gross Merchandise Value (GMV) by 2028 and double its profits, driven by expansion in high-growth markets such as India, China, and Mexico, and enhancing omni-channel capabilities in Canada and Chile. Currently, approximately 25% of Walmart’s international sales are online, reflecting successful digital integration. This strategic focus is supported by strong financial performance, including a 51% stock return over the past year, total revenues of $685 billion, and 4.22% revenue growth. Notably, 19 analysts have revised earnings expectations upward. Recent first-quarter results surpassed forecasts for earnings per share and comparable sales, with Walmart’s e-commerce operations achieving profitability in the U.S. and globally for the first time—a significant operational milestone. Despite plans to reduce its workforce by approximately 1,500 positions to streamline expenses, Walmart has reiterated its full-year guidance. This positive outlook is echoed by other analysts, with KeyBanc, Raymond James, and Bernstein all maintaining positive ratings, citing the company's resilience, diversified sourcing, and focus on high-margin revenue streams.

Key Decisions for Investors

• Investors should consider Walmart's demonstrated momentum, underscored by strong Q1 earnings, recent e-commerce profitability, and positive analyst sentiment from firms like Bernstein, KeyBanc, and Raymond James.
• The ambitious $200 billion GMV target for Walmart International by 2028 and its focus on omni-channel expansion in key global markets represent significant long-term growth catalysts to monitor.
• While the planned job cuts aim to streamline expenses, investors should evaluate their impact on operational efficiency and margin improvement against the backdrop of Walmart's reiterated full-year guidance and ongoing strategic initiatives.