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Why Walmart Stock Topped the Market Today

Motley Fool - Mon Feb 23, 4:34PM CST

Key Points

A sluggish stock market couldn't prevent Walmart(NASDAQ: WMT) stock from inching higher on the first trading day of the week. Shares of the monster retailer rose by more than 2% across that trading session, contrasting favorably with the S&P 500 index's 1% decline, on the back of two analyst price target raises.

A pair of Monday moves

Both Greg Melich of Evercore ISI and Karen Short of Barclays became incrementally more bullish on Walmart's future.

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The facade of a Walmart store.

Image source: Getty Images.

Melich added $5 to his fair value assessment, raising it to $135 per share, while maintaining an outperform (buy, in other words) recommendation. According to reports, the analyst was particularly taken by the company's robust 27% year-over-year growth in digital sales in its fourth quarter, the results of which were published last Thursday. He also feels that its notable growth in relatively high-margin segments like advertising should keep it on top of the retail sector.

As for Short, she raised her price target to $132 per share from $125, while keeping her overweight (buy) recommendation intact. Her view of the quarter's performance, according to reports, was that management did a fine job bolstering unit share gains in the period. She also waxed optimistic about e-commerce, writing that the recent impressive growth figures could be sustained.

This retailer should be on your shopping list

The immediate investor reaction to Walmart's earnings last week wasn't positive. Management's guidance wasn't as robust as some had hoped, and the cautious tone it took on consumer spending didn't help. Personally, I wouldn't worry too much about these factors, as Walmart continues to be a strong outperformer in nearly every aspect of the retail industry that counts. I think more double-digit growth figures are in its future, and I'd be bullish like those two analysts.

Should you buy stock in Walmart right now?

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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Walmart. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

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