Walmart price forecast: Goldman Sachs sees a 28% upside

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on Oct 19, 2021
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  • Goldman Sachs adds Walmart Inc to its "Americas Conviction List".
  • Analyst Kate McShane reiterated WMT at "buy" with a PT of $180.
  • Shares of the retail giant jumped 2.0% on the upgrade this morning.

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Walmart Inc (NYSE: WMT) remained far from promising for investors this year, but Goldman Sachs says its days of underperformance are finally over.

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Walmart added to ‘Americas Conviction List’

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In a note on Tuesday, analyst Kate McShane added Walmart to Goldman Sachs’ “Americas Conviction List” as she reiterated her “buy” rating on the stock with a price target of $180 that represents a 28% upside from where it closed on Monday.

The retail giant replaced peer Target Corp on the list that McShane continues to rate at “buy” with an upside to $280. She wrote:

We are adding buy-rated WMT to the list and removing buy-rated TFT, while remaining constructive on fundamentals for both companies into 2022.

Shares of Walmart that’s offering early access to Black Friday deals to its Walmart+ subscribers jumped 2.0% on the upgrade this morning.

Reasons why McShane likes Walmart

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The recent underperformance, as per McShane, made Walmart a better pick at this point versus Target that is already up roughly 45% this year. Walmart’s investments and its ability to grow earnings before interest and taxes were among other reasons why she likes Walmart.

WMT was one of the strongest stories at the Goldman Sachs Retail Conference in September. It’s in a position to grow EBIT dollars along with continued investments on greater scale of its eCommerce business, improving mix, and growth from higher-margin ancillary businesses like advertising.

She expects Walmart to expand its global market share “profitably” in 2022. Last month, Walmart partnered with Ford Motor to ramp up its autonomous delivery efforts.

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