Barclays raises Walmart price target on strong U.S. performance, flags FX headwind

Investing.com - Barclays on Friday lifted its target price on Walmart Inc (NYSE:WMT) stock by $12 to $90, after world largest retailer reported its third quarter earnings this week, with brokerage noting strong operational performance in the US, particularly in grocery and general merchandise, as well as ongoing expansion of its marketplace.

Barclays (LON:BARC) however flagged potential foreign exchange headwinds, noting that a stronger dollar could weigh on revenue from Walmart’s international operations.

Barclays also revised its model to expect a higher per share profit for 2025 at $2.48, compared to its prior estimate of $2.46. Walmart guide has it in the range of $2.42 to $2.47, which it increased from its previously issued forecast between $2.35 and $2.43.

Walmart also lifted its 2025 forecast for consolidated net sales growth to 4.8%-5.1%, up from its earlier projection of 3.75%-4.75%.

The brokerage expects Walmart’s gross profit margin to improve, driven by reduced e-commerce losses and better inventory management. While SG&A expenses rose, they increased at a slower pace compared to prior quarters.

Walmart has been ramping up investments in its e-commerce business, expanding product offerings online, and automating its supply chain to enhance delivery speeds and stock fresher produce. The efforts aim to meet growing demand for online grocery shopping.