The second half of this year is the perfect time for Walmart, according to JPMorgan. The firm upgraded Walmart to overweight from neutral and raised its price target to $81, representing a 23% gain from Friday’s close. JPMorgan said that is a December 2025 target. “We believe the stock adds a strong balance of defense and offense on both the top and bottom lines in a soft (to softening) consumer backdrop with a highly uncertain 2H24 ahead,” wrote analyst Christopher Horvers in a Monday note. “Moreover, we believe estimates remain beatable while there is the potential for an uptick in the multiple as we expect WMT to go on a multi-year double-digit EPS growth algo given market share gains, rising alternative profit pool benefits, and its International segment profit inflection.” Walmart shares have been on a tear since reporting better-than-expected first-quarter results in mid-May. Walmart also said it would hit the high end of its full-year guidance as it won over more higher-income shoppers. The stock is up 25% in 2024, more than double the S & P 500’s gain. JPMorgan said that, along with liking Walmart’s merits, there was also a macroeconomic reason behind the call. The upgrade was partly due to “our desire to add more defensiveness to our ratings given signs of softening discretionary spending while we also we stare down a very uncertain backhalf that includes the presidential election cycle, holiday calendar blues with five fewer days/Christmas on a Wednesday, and an unclear outlook on rate cuts,” stated the note. JPMorgan said it was maintaining its 2024 earnings-per-share forecast of $2.57, which is above the $2.43 Wall Street consensus. The firm also said it’s raising its 2025 EPS estimate to $2.86.
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