Walmart Analyst Sees Bright Horizon, Anticipation Builds for PhonePe, Flipkart IPOs

Oppenheimer analyst Rupesh Parikh maintained Walmart Inc WMT with an Outperform and raised the price target from $175 to $185.

He updated his views with Walmart shares approaching Parikh’s prior $175 price target. 

As he looks forward, he noted the bull case is still in the early to middle innings and stated the potential for continued outperformance over a 12-18 month horizon. 

Also Read: Walmart Announces 3-For-1 Stock Split: The Details

Parikh also expressed optimism over the initial public offering of PhonePe and Flipkart down the road, potentially unlocking more shareholder value. 

In the near term, the analyst noted the potential for a below-consensus fiscal 2024 guide driven by management’s recent commentary on periods of potential deflation in 2024 and uncertainty on product mix-related margin headwinds. 

Walmart remained a top pick for Parikh. Shares have struggled on recent reports so that he would take advantage of any profit taking on the print should it materialize.

The analyst highlighted that over the last 12 months, Walmart shares are up 21% vs. a 21% gain in the S&P 500 but are outperforming most peers. Year-to-date, momentum has continued, with shares up 8% vs. an increase of 5% in the S&P 500. Parikh noted that Walmart shares have also outperformed in the last four election years.

Parikh now expects fourth-quarter EPS sales at least in line with a Street figure of $1.63, management’s implied guidance of $1.57-1.65, and sales of $171.01 billion. He projected a fiscal 2024 EPS of $6.85, below a Street figure of $7.06, and sales of $668.96 billion.

 Price Action: WMT shares traded higher by 0.51% at $170.16 on the last check Monday.

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