Walmart Stock Is Up 29% This Year. Can the Rally Keep Going? | The Motley Fool (2024)

This global retail blue chip is benefiting from several growth tailwinds.

Walmart (WMT 1.46%) has been ringing up the register for investors with shares returning 29% thus far in 2024. The first-quarter results from the world's largest retailer were highlighted by solid growth and expanding margins. At a time when consumer pocketbooks are stretched dealing with lingering inflation and high interest rates, Walmart is benefiting from U.S. shoppers looking for a good deal.

On the other hand, is the stock still a great value for investors at its all-time high? Let's explore why the rally may have more room to run.

A strong start to fiscal 2025

A major theme for Walmart has been the success of its omnichannel strategy. The company is finding that its customers are attracted not only to the everyday low prices across the more than 10,500 stores globally but also to the convenience of online shopping, including store-fulfilled pickup and delivery options.

Walmart's fiscal 2025 first-quarter revenue (for the three months ended April 30) increased by 6% year over year. Within that amount, global e-commerce led growth, up 21% from a year earlier.

In the U.S., comparable-store sales growth of 3.8% came in better than expected, with e-commerce contributing the bulk of that increase or 280 basis points of the total. Q1 adjusted earnings per share (EPS) of $0.60 increased by 24% from the prior-year quarter.

In terms of guidance, management now expects full-year revenue growth at the high end of the previously announced 3% to 4% target range. The company also sees EPS tracking toward the high end or slightly above the original $2.23 to $2.37 forecast announced earlier in the year, representing up to a 7% increase from fiscal 2024.

Overall, the sense is that Walmart is off to a strong start for the new year and is being rewarded by the current market rally.

Walmart Stock Is Up 29% This Year. Can the Rally Keep Going? | The Motley Fool (1)

Image source: Getty Images.

Walmart's e-commerce business is driving growth

Maybe the biggest development for Walmart is the ongoing shift in the business mix increasingly toward online operations. This is important for several reasons.

First, the trend has been positive for profitability. Walmart's gross-profit margin of 24.1% in Q1 climbed 23.7% in the period last year. That includes a growing advertising business as well as the Walmart+ membership, the company's answer to Prime from Amazon.

The sense is that significant investments in technology and logistics in recent years have paved an earnings runway that is expected to continue. By this measure, Walmart can be seen as generating increasingly high-quality cash flows, adding to its appeal as an investment.

Second, the omnichannel strategy and e-commerce presence are allowing Walmart to pull in a more diverse customer base, including high-income households which have driven the majority of its market-share gains.

The company's wider reach represents new growth opportunities and monetization potential over the long run compared to Walmart's traditional target demographic. This was a topic discussed by Walmart CFO John Rainey during the last earnings conference call:

We're seeing higher engagement across income cohorts with upper-income households continuing to account for the majority of the share gains... That shows that customers are coming to us and we're a consideration where we haven't been before.

Finally, there is also an implication here for Walmart's valuation. As the business continues to transform from just a big-box retailer, the future may likely hold structurally higher margins with room for an expansion of its earnings multiple and growth premium.

This dynamic helps make a case that shares of Walmart still offer good value with more upside. The stock is currently trading at approximately 28 times management's full-year EPS guidance. Notably, this is below the stock's five-year average for the multiple with a price-to-earnings multiple of 29.

Looking out into fiscal 2026, Walmart is forecast to reach an EPS of $2.68 by next year, according to the average of Wall Street estimates. This level implies a one-year forward price-to-earnings ratio of 25, which begins to appear increasingly attractive based on the company's ability to keep driving earnings higher.

Walmart Stock Is Up 29% This Year. Can the Rally Keep Going? | The Motley Fool (2)

WMT PE Ratio (Forward) data by YCharts.

Final thoughts

There's a lot to like about Walmart as a market leader and blue chip stock. It likely won't be a straight line upward, but I believe there's a good chance shares of Walmart will be trading higher by this time next year.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Dan Victor has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Amazon and Walmart. The Motley Fool has a disclosure policy.

Walmart Stock Is Up 29% This Year. Can the Rally Keep Going? | The Motley Fool (2024)


What is the prediction for Walmart stock? ›

The average price target for Walmart is $73.16. This is based on 28 Wall Streets Analysts 12-month price targets, issued in the past 3 months. The highest analyst price target is $81.00 ,the lowest forecast is $66.00. The average price target represents 6.18% Increase from the current price of $68.9.

What is the Walmart price forecast for 2024? ›

The forecasted Walmart price at the end of 2024 is $92.07 - and the year to year change -42%. The rise from today to year-end: +42%. In the middle of 2024, we expect to see $69.66.

How much will Walmart stock be worth in 10 years? ›

Long-Term Walmart Stock Price Predictions
2027$ 86.1126.80%
2028$ 93.2037.24%
2029$ 100.8848.55%
2030$ 109.1960.78%
2 more rows

What is the outlook for Walmart? ›

Walmart is forecast to grow earnings and revenue by 7% and 4% per annum respectively. EPS is expected to grow by 7.8% per annum. Return on equity is forecast to be 21.8% in 3 years.

Which stock is splitting in 2024? ›

The most high-profile of those companies include retail giant Walmart and chipmaker Nvidia, as Fast Company previously reported. And other companies in 2024 have split or announced they will split their stock. As CNBC notes, some of those companies include Williams-Sonoma, Broadcom, and Sony Group.

How much was $1000 in Walmart stock in 1970? ›

Investing $1,000 In Walmart IPO: Walmart offered shares for $16.50 on Oct. 1, 1970 for its IPO. A $1,000 investment could have purchased 60.61 shares of Walmart stock.

What would happen if I invested $1000 in co*ke 10 years ago? ›

You would have more than doubled your money, with a total investment worth of $2,029.55. That's a 103% return, or a 7.23% annual rate of return. Interestingly, despite co*ke's dominance on the world stage, investing in co*ke's main rival, Pepsi, 10 years ago would have given you more pop for your buck.

Is Walmart stock a good long-term investment? ›

WMT boasts an average earnings surprise of 8.3%. Earnings for Walmart are forecasted to see growth of 9% for the current fiscal year as well. Because stock prices react to revisions, buying stocks with rising earnings estimates can be very profitable.

What is the record high for Walmart stock? ›

Historical daily share price chart and data for Walmart since 1972 adjusted for splits and dividends. The latest closing stock price for Walmart as of June 21, 2024 is 67.91. The all-time high Walmart stock closing price was 68.01 on June 20, 2024.

Why is Walmart stock going down? ›

Walmart's value hasn't crashed. The reduced share price is the result of a previously announced stock split. Back in January, Walmart announced it would split its stock at a 3-to-1 ratio on February 26, 2024, which is today.

How much was Walmart stock in 1972? ›

The closing price for Walmart (WMT) in 1972 was $0.01, on December 29, 1972.

Is Walmart a good stock to buy zacks? ›

The Zacks Consensus Estimate for Walmart's current financial-year sales and earnings suggests growth of 4.2% and 9%, respectively, from the year-ago reported numbers. This Zacks Rank #2 (Buy) company has a trailing four-quarter earnings surprise of 8.3%, on average.

Is Walmart a buy or sell right now? ›

Walmart has received a consensus rating of Moderate Buy. The company's average rating score is 2.90, and is based on 27 buy ratings, 3 hold ratings, and no sell ratings.

Will Wal stock go up? ›

WAL Stock 12 Month Forecast

Based on 13 Wall Street analysts offering 12 month price targets for Western Alliance in the last 3 months. The average price target is $75.90 with a high forecast of $86.00 and a low forecast of $68.00. The average price target represents a 24.30% change from the last price of $61.06.

Is Walmart a long term investment? ›

The company's resilience, innovative strategies and steady expansion make it a brilliant investment in the long term. Perfect for those who want growth and stability in times of high inflation and expensive prices. Walmart stock could be a valuable addition to your 2024 portfolio.

Is Walmart a profitable stock? ›

Walmart's stock has a 1.3% dividend yield, in line with the S&P 500. Certainly, you can find higher-yielding stocks, but Walmart also offers capital appreciation potential given its growing profitability.


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