UPDATE: Walmart (WMT) PT Raised to $155 at JPMorgan
JPMorgan analyst Christopher Horvers raised the price target on Walmart (NYSE: WMT) to $155.00 (from $150.00) while maintaining a Neutral rating.
The analyst comments "WMT’s 3Q EPS came in 14% ahead the Street with a US comp of +8.2%, beating expectations of 5.5-6.5% and our raised-into-the-print /near-high 5.8% forecast . Gross margin declined 89 bps to 23.7%, in line with our 23.8% estimate, owing to markdowns and mix of sales in the US, a LIFO charge at Sam’s Club, and the timing of Flipkart’s low margin The Big Billion days. As we previewed, overall inventory appears largely clean, increasing 12% YOY vs. 25% last quarter, with WMT intending to clear remnant TV, home, and apparel excess inventory during holiday events. FY raised for 3Q upside, with 4Q remaining conservative. On the guidance front, WMT took the middle road by raising the year for the 3Q beat but leaving a conservative 4Q untouched. Specifically, WMT raised its FY23 comp guide, with the US up ~5.5% for the full year (vs. up ~4% previously). In 4Q, the company expects US comps up 3% (Street 3.5%), operating income up 1% to down 1%, and EPS down 3- 5% (or ~$1.47 at the midpoint vs. the Street’s $1.48). With mid-teens inflation in grocery persisting, which represents 60% of WMT US sales, we view this as clearly conservative."