Goldman Sachs maintains Buy on Walmart stock with $101 target

On Friday, Walmart Inc. (NYSE:WMT) received a reaffirmed Buy rating from Goldman Sachs, with a steady price target of $101.00. Following Walmart's first-quarter earnings surpassing expectations and the confirmation of its 2025 financial outlook, the retail giant's shares saw a modest decline of 0.5%, in contrast to the S&P 500 which experienced a 0.4% increase. Goldman Sachs analyst Kate McShane highlighted Walmart's performance amidst a challenging economic landscape, noting the company's ability to maintain its full-year guidance. This decision comes after a reduction in tariffs since the last reiteration of guidance on April 9, 2025.

McShane pointed out that Walmart has developed strategies to mitigate the impact of the uncertain environment, including improved inventory management and the cultivation of alternative revenue streams. These initiatives are expected to support the company's bottom-line growth, building on the company's robust annual revenue of $685 billion. Additionally, the retailer's efforts in managing product assortment and pricing are anticipated to contribute positively. InvestingPro analysis reveals that Walmart has maintained dividend payments for 53 consecutive years, demonstrating remarkable financial stability.

The lack of second-quarter operating income growth or earnings per share guidance from Walmart is attributed to the dynamic macroeconomic conditions shaped by the tariff environment, which could potentially lead to higher prices and unexpected changes in demand elasticity. Despite these challenges, McShane expressed confidence in Walmart's ability to sustain solid earnings growth throughout 2025.

The analyst's optimism is further supported by Walmart's potential for market share expansion, bolstered by its value and convenience offerings. Moreover, the company is predicted to witness an improvement in its profitability profile, with a current gross profit margin of 24.9%. Goldman Sachs' endorsement of the Buy rating reflects a positive outlook on Walmart's strategic positioning and its prospects for continued financial success. Based on InvestingPro 's Fair Value analysis, the stock appears to be trading above its intrinsic value. Investors can access detailed valuation metrics and 12 additional ProTips through InvestingPro's comprehensive research report, available for over 1,400 US stocks.

In other recent news, Walmart Inc. reported its first-quarter earnings for fiscal year 2026, surpassing market expectations with an earnings per share (EPS) of $0.61, above the forecasted $0.58. The company's revenue reached $165.61 billion, slightly exceeding the anticipated $165.60 billion. Analysts from TD Cowen, Citi, and Truist Securities maintained their Buy ratings for Walmart, with price targets set at $115, $120, and $111, respectively. These ratings reflect confidence in Walmart's strategic initiatives and operational performance, despite some challenges like tariffs and changes in product mix. The company reported a 4.5% increase in U.S. comparable sales, with Sam's Club comparable sales rising by 6.7%. Walmart's e-commerce segment achieved profitability for the first time globally, with sales surging by 22%, contributing positively to its financial results. Despite the positive earnings, Walmart continues to face pressures from tariffs, which the company is navigating with flexible inventory management. The company reaffirmed its full-year sales growth guidance of approximately 4%, projecting confidence in its ability to manage costs and deliver shareholder value.

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