Walmart Delivers Broad-Based Market Share Gains: Analysts Deep Dive Into Q2 Print, But Have Concerns About Q3

Walmart Inc WMT reported on Thursday solid second-quarter earnings, even as rival Target Corp TGT posted a decline in quarterly sales.

The results came amid an exciting earnings season. Here are some key analyst takeaways from the earnings release.

KeyBanc Capital Markets On Walmart

Analyst Bradley Thomas maintained an Overweight rating while raising the price target from $175 to $177.

There were a number of positives in Walmart’s second-quarter print, including “broad market share gains, momentum in key growth initiatives, and favorable early results in its automation initiative,” Thomas said in a note.

“Management raised 2023 guidance to reflect strong 2Q results, while slightly raising expectations for Walmart U.S. and International,” the analyst wrote. “Looking ahead, we believe WMT is well-positioned for continued market share gains, benefiting from growth initiatives and the automation of its supply chain,” he added.

Check out other analyst stock ratings.

Telsey Advisory Group On Walmart

Analyst Joseph Feldman reiterated an Outperform rating while lifting the price target from $168 to $185.

Walmart reported healthy second-quarter results, driven by strong execution, Feldman said. “We also were impressed to see the gross margin improvement of 50 bps to 24.0%, driven by gains from supply chain initiatives and lapping of markdowns from last year,” he added.

Walmart’s new initiatives should strengthen its relationship with customers and help generate a profitable market share, the analyst further stated.

Morgan Stanley On Walmart

Analyst Simeon Gutman reaffirmed an Overweight rating and price target of $160.
Walmart reported healthy revenue growth and margin expansion for the second quarter, Gutman stated. The results reflect a “clear theme of market share gains across WMT's business,” he added.

“To pick at something, Q3 EBIT margin guidance implies modest contraction,” the analyst wrote. He added that Walmart had outperformed its guidance in each of the first two quarters of fiscal 2024 and “if this track record continues, Q3 is likely also conservative both on sales and margins.”

WMT Price Action: Shares of Walmart were up 0.1.71% to $158.35 Friday morning.

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