2023-11-20 22:27:55
The retail chain giant’s third quarter results for fiscal year 2024 failed to meet the very high expectations of investors, particularly in the United States. (Photo: 123RF)
What to do with the stocks of Walmart, Coveo and Boralex? Here are some analyst recommendations likely to move prices soon. Note: the author may have an opinion completely different from that expressed.
Walmart Inc (WMT-NYSE, US$155.35): The results did not please investors, and the stock lost almost 9%
The retail chain giant’s third quarter results for fiscal year 2024 failed to meet the very high expectations of investors, particularly in the United States. In response, the stock fell nearly 9%, explains Kelly Bania, analyst at BMO Capital Markets.
Although revenues remain high and management is even raising its forecasts, investors seemed disappointed that it indicated that its profitability growth will be at the lower end of its forecast range, while the analyst and investors felt that it was already rather conservative.
That said, the analyst sees several interesting factors. Traffic remains intense in the retailer’s stores. But also, the growth of its online commerce and its spending suggest that Walmart will continue to widen a gap between it and its competitors thanks to its initiatives promoting the growth of its margins.
Consequently, Kelly Bania reiterates his Outperform recommendation, but nevertheless reduces his target price somewhat from US$180 to US$175.
Earnings before interest and taxes (PBIT) for the 3rd quarter were somewhat disappointing compared to the first half of the financial year. In the United States, EBIT simply matched that of the similar quarter of the previous year, notes the analyst.
On the positive side, U.S. in-store traffic increased 3.4%, and e-commerce increased 24%. The analyst estimates that the firm’s overall spending is on track to reach US$3.4 billion (US$B) for fiscal year 2024, compared to US$2.7B for fiscal year 2024. 2023.
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