Walmart To Gain Market Share; Reach 60% Of US Population In 30 Minutes Or Less

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Last week, Walmart Inc (NASDAQ: WMT) hosted the Walmart Associates and Shareholders Meeting in Fayetteville, Arkansas.

Here are some key analyst takeaways from the event:

  • BofA Securities analyst Christopher Nardone reiterated a Buy rating and price target of $144.
  • BTIG analyst Robert Drbul maintained a Buy rating and price target of $145.
BofA Securities: The event reaffirmed the conviction that the current macro backdrop, of strength from the upper income cohort and caution from value-seeking consumers, is "conducive" for Walmart to accelerate its market share gains, Nardone said in a note. He added that this is because of:

  • Price Advantage: The company can "tap into high growth, margin rich businesses like advertising and membership to help fund pricing investments," while tariff refunds of an estimated around $3 billion may also be used to invest in price.
  • Speed Advantage: The company has best-in-class delivery speeds, having recently introduced 30 minutes or less delivery in 33 markets.
The company is likely to return to beat-and-raise prints starting next quarter, the analyst stated.

Walmart announced its first restaurant integration with Express Delivery with Subway, which is expected to expand to about 1,400 locations by the end of the summer, he further said.

BTIG: The event highlighted the seamless execution of Walmart's management succession plan, with new CEO John Furner and his team positioning the company well to "continue to lead the retail industry into the next chapter," Drbul wrote. He further noted that:

  • Walmart continues to focus on its private brands. The Great Value will be relaunched this year, while the Better Goods brand has expanded from 180 SKUs (stock-keeping units) to around 500 SKUs.
  • Walmart consumers lowered their purchase to 9 gallons per fill-up, from last year's 11 gallons per fill-up, which has led to an increase in traffic, giving the company a competitive advantage.
  • The company continues to gain market share across income cohorts, as the investment in delivery speed continues. Management noted that the company can reach 60% of the US population in 30 minutes or less.
WMT Price Action: Shares of Walmart had risen by 0.73% to $119.75 at the time of publication on Monday.