Things are not going great for retailers at the moment. However, according to Goldman Sachs, that shouldn’t be the reason not to buy Walmart stock.
In this week’s note sent to clients, Goldman’s retail analyst Kate McShane shared three reasons why Walmart stock is a buy. The first reason is “strong top-line trends along with market share gains.” Also, McShane is high on Walmart because improved inventory position that should result in expected “moderated markdown pressure” and the fact that its “long-term algorithm remains intact.”
McShane has a $155 price target for Walmart compared to the current $138.91 per share. The analyst also has adjusted profits estimates from $5.69 to $5.89 per share while expecting $6.44 in 2023.
Sharing its second-quarter results earlier this week, Walmart revealed some positives that give optimism to investors. The retailer beat the Wall Street estimates by a lot, reporting $152.86 billion in revenue versus the $150.81 billion expected. The expected earnings per share were set at $1.62 but came at $1.77 adjusted. The same-store sales also exceeded expectations, with Walmart U.S. having a Q2 growth of 6.5% to 5.9% predicted.
Walmart shares have been up 7.91% in the past month, peaking at $139.52, which represents the highest mark since mid-May. However, Walmart stock still remains 3.93 down year to date.