JPMorgan has upgraded Walmart to ‘Overweight’ from ‘Neutral’ and raised its price target to $81, highlighting the retail giant’s robust performance during uncertain economic times. The bank sees Walmart as a solid investment, capable of both defense and offense in a soft consumer market. Analyst Christopher Horvers emphasized Walmart’s ability to outperform Wall Street estimates on revenue and profits, driven by market share gains from value-oriented consumers. Walmart’s grocery business has significantly increased its market share, showcasing its value proposition. The company’s supply chain efficiency program could enhance profit margins by adding up to 100 basis points of cost efficiency.
Moreover, Walmart’s alternative profit streams, including third-party fulfillment, Walmart+ subscriptions, and its growing advertising business, are crucial. These initiatives help expand the number and variety of sellers on its marketplace, creating a synergistic growth cycle between its topline and alternative profit strategies. Overall, JPMorgan believes Walmart’s strategic positioning and growth initiatives make it a compelling buy for investors, even amid economic uncertainty. The upgraded price target of $81 represents a potential 21% upside from current levels, reflecting the bank’s confidence in Walmart’s continued success.