On Friday, BMO Capital Markets maintained its Outperform rating on Walmart Inc. (NYSE:WMT) stock and increased the price target to $75.00, up from the previous $65.00.
This adjustment follows Walmart's first-quarter fiscal year 2025 performance, which exceeded expectations due to gross margin expansion and robust performance across all business segments.
Walmart reported a notable first-quarter beat, with all three of its business segments performing better than anticipated. The company's management provided insights that suggest this positive trend may continue.
Highlights from the quarter included a reduction in Ecommerce losses, strong gross margins, competitive price positioning, and general merchandise units exceeding sales growth.
In response to these results, BMO Capital has raised its expectations for Walmart's fiscal year 2026 earnings per share (EPS), anticipating another year of high single-digit percentage EPS growth. The new price target of $75 reflects a 28-29 times multiple of the revised F26 EPS estimate.
The analyst firm believes that Walmart's ongoing investments in omnichannel capabilities and high-margin initiatives are building a significant competitive advantage. This, in turn, is expected to sustain investor confidence in the retailer's stock, as reflected by the raised price target and the continued Outperform rating.
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