Key insights
- Guggenheim raised its price target on Walmart to $137, citing scale advantages and operational efficiency. The analyst prefers Walmart over Costco due to its exposure to alternative profits. Walmart's recent positive sales and profit reports, along with an upgrade from Erste Group, contribute to a bullish outlook. However, InvestingPro analysis suggests Walmart may be overvalued.
Investing.com - Guggenheim raised its price target on Walmart Inc. shares (NYSE:WMT) to $137 from $120 on Monday while maintaining a Buy rating. The stock currently trades at $126.77, up 38% over the past year.
Analyst Robert Drbul said the business remains well-positioned due to scale, mix, value perception, and operational intensity for market volatility between risk-off and risk-on preferences over the past year.
The analyst noted significant exposure to both consumables and discretionary spending is desirable, while unmatched scale makes unexpected challenges such as surging diesel costs more manageable than most retailers. With a market capitalization exceeding $1 trillion and revenue of $713 billion, Walmart’s operational reach is unparalleled in the retail sector.
Drbul said the relentless pursuit of operational improvement leaves little opening for competitor inroads. The positioning merits the elevated 19.6x 2026 estimated EBITDA multiple, he added. The company currently trades at an EV/EBITDA of 24.41. According to InvestingPro analysis, Walmart appears overvalued relative to its Fair Value estimate. Investors can access detailed valuation insights through InvestingPro’s comprehensive screening tools, which include 14+ additional ProTips for Walmart and a detailed Pro Research Report covering all key investment metrics.
Guggenheim said it continues to prefer Walmart to Costco Wholesale Corp. (NASDAQ:COST), given Walmart’s exposure to alternative profits which account for 30% of EBIT. The new price target suggests a 10% total shareholder return.
In other recent news, Walmart has reported an increase in both sales and profit for the fourth quarter. The company anticipates a sales growth of around 4% and an operating profit increase of approximately 7% for the current financial year. This positive outlook has led Erste Group to upgrade Walmart’s stock rating from hold to buy. Additionally, Sam’s Club, a subsidiary of Walmart, announced a $10 increase in its annual membership fees starting May 1. The new fees will be $60 for basic membership and $120 for the higher-tier option.
In another development, KeyBanc Capital Markets has expressed optimism about the potential for AI and digital growth at Walmart following the 2026 Shoptalk conference. Meanwhile, DA Davidson highlighted that the current tax refund season is the strongest since at least 2013, with total refunds up 13.6% compared to the previous year. This increase in refunds could potentially benefit retailers like Walmart. On a broader economic note, Goldman Sachs has revised its forecast for US consumer spending growth in 2026, lowering it due to rising oil prices linked to geopolitical tensions in the Middle East.
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