Walmart’s (WMT) omnichannel transformation is set to continue to gain momentum and support more sustainable sales in the US, BofA Securities said in a note Thursday.
The firm reiterated its buy rating and $190 price target on the retailer.
The analysts, including Robert Ohmes, said that in fiscal Q4, they expect Walmart to see moderating sales growth as grocery inflation continues to decline, headwinds from store closures and recovery costs related to the recent hurricane near Acapulco, Mexico, and a lower than expected interest expense.
BofA expects the retailer’s fiscal Q4 adjusted earnings per share to be $1.61 and its gross margin expansion to continue with support from growing digital ad contributions, the analysts said.
For fiscal 2024, BofA maintains its adjusted EPS outlook of $6.45, in line with Walmart’s guidance of $6.40 to $6.48.
Looking ahead, the retailer’s digital advertising, Walmart+ membership, and growth in third-party marketplace and fulfillment services should support sales growing faster than costs over the next five years, the analysts said.