On Tuesday, CFRA maintained a Buy rating on Walmart (NYSE: NYSE:WMT) and increased its price target to $96.00 from $92.00. The firm's analyst cited several factors for the optimistic outlook, including an expected rise in high-margin services revenue. This includes advertising, which grew by 28% year-over-year in the fiscal third quarter, as well as fulfillment services, data monetization, and membership revenue.
The analyst also anticipates margin expansion driven by supply chain automation, growth in general merchandise—which turned positive this quarter in Walmart U.S.—and improved e-commerce profitability. Notably, Walmart U.S. experienced a 40% year-over-year reduction in net delivery cost per order.
Walmart's adjusted earnings per share (EPS) for the fiscal third quarter, which ended in October, were $0.58, marking a 14% increase from the previous year and surpassing expectations by $0.05. The company's comparable U.S. sales rose by 5.3%, with a 3.1% increase in transactions and a 2.1% rise in the average ticket, outperforming the 3.9% consensus. E-commerce sales also saw significant growth, up by 27%.
The company's operating income saw an 8% year-over-year increase, with margins improving by 10 basis points to 4.0%, despite facing discrete challenges such as hurricane-related expenses and a shift in the timing of India's Big Billion Day.
In other recent news, Walmart has reported strong third-quarter financial results, surpassing revenue and earnings expectations. The company's adjusted earnings per share (EPS) was $0.58, exceeding the consensus estimate of $0.53. U.S. comparable sales rose by 5.3%, significantly higher than the anticipated 3.6%. Furthermore, Walmart's U.S. e-commerce sales experienced a robust 22% growth, outperforming expectations of 15%.
Analysts from firms such as Jefferies, BofA Securities, DA Davidson, and BMO Capital Markets have maintained their positive ratings on Walmart, emphasizing its diverse, high-margin revenue streams and strong performance across all business segments. Piper Sandler increased the company's price target to $93 from the previous $83 while maintaining an Overweight rating.
In addition to its financial performance, Walmart has seen growth in customer traffic and market share, while also expanding its margin. This is evidenced by a 40-basis-point global gross margin expansion, benefiting from an improving business mix, particularly in Walmart’s digital business, where Walmart Connect revenue increased by 26% year-over-year.
InvestingPro Insights
Walmart's strong performance and positive outlook, as highlighted in the article, are further supported by real-time data from InvestingPro. The company's revenue for the last twelve months as of Q2 2025 stands at an impressive $665.03 billion, with a revenue growth of 5.43% over the same period. This aligns with the article's mention of increased sales and positive comparable U.S. sales growth.
InvestingPro Tips reveal that Walmart has raised its dividend for 29 consecutive years, demonstrating a consistent commitment to shareholder returns. This is particularly noteworthy given the company's recent strong performance and increased financial forecasts. Additionally, 12 analysts have revised their earnings upwards for the upcoming period, which corroborates CFRA's optimistic outlook and increased price target.
It's worth noting that Walmart is trading near its 52-week high, with a substantial 64.56% price total return over the past year. This performance reflects the market's positive reception of Walmart's strategic initiatives and financial results, as discussed in the article.
For investors seeking more comprehensive insights, InvestingPro offers 16 additional tips for Walmart, providing a deeper understanding of the company's financial health and market position.
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