Inside Walmart's Comeback in 2024: Will WMT ETFs Rally in 2025?
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Dec 18 2024
0mins
Source: NASDAQ.COM
Walmart's Stock Performance: Walmart's stock has surged approximately 78.7% this year, driven by investments in technology and e-commerce, earning it the title of Yahoo Finance's "Company of the Year" for 2024, while its shares have increased over 133% in the past five years.
Future Outlook and Recommendations: Despite a slight overvaluation compared to industry peers, Walmart maintains strong investor confidence with a high average brokerage recommendation (1.25), and potential investors are advised to consider Walmart-heavy ETFs to mitigate company-specific risks.
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Analyst Views on WMT
Wall Street analysts forecast WMT stock price to rise
26 Analyst Rating
25 Buy
1 Hold
0 Sell
Strong Buy
Current: 118.570
Low
119.00
Averages
125.75
High
136.00
Current: 118.570
Low
119.00
Averages
125.75
High
136.00
About WMT
Walmart Inc. is a technology-powered omnichannel retailer. The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce Websites and mobile applications, located throughout the United States (U.S.), Africa, Canada, Central America, Chile, China, India and Mexico. It operates in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Walmart's Growth Slows, Stock Faces Pressure
- Sales Growth Slows: Walmart's U.S. comparable-store sales grew by 4.1% in the latest quarter, but operating income only rose by 5% due to rising fuel costs, which would have otherwise led to a 7.5% increase, indicating a struggle for growth under cost pressures.
- AI Investment Yields Results: Walmart's ongoing investments in artificial intelligence and automation have paid off, with its AI shopping assistant Sparky seeing weekly active users double quarter-over-quarter, and these users ordering 35% more than regular customers, showcasing significant advancements in customer experience and operational efficiency.
- Consumer Spending Pressure: CFO John Rainey noted that while high-income customers are spending confidently across categories, lower-income consumers are becoming more budget-conscious, as evidenced by the drop in average gallons filled at fuel stations falling below 10 for the first time since 2022, reflecting increased financial stress among consumers.
- High Valuation Risks: Despite Walmart's stable market performance, its staggering price-to-earnings ratio of 41.5 times and a dividend yield of only 0.8%, lower than the S&P 500's 1.1%, raises concerns for risk-averse investors about the sustainability of its premium valuation amidst slower growth prospects.
See More
Walmart Upgrades Omnichannel Capabilities Reshaping Retail Landscape
- Omnichannel Enhancement: Walmart's upgraded omnichannel capabilities are reshaping how consumers balance price, convenience, and delivery options, thereby strengthening its position in a highly competitive retail market.
- Competitive Comparison: Walmart's strategy contrasts sharply with Target's experience-driven approach, highlighting Walmart's flexibility and adaptability in meeting diverse consumer needs.
- Intensified Market Competition: As competition in the retail sector intensifies, Walmart's omnichannel upgrades enable it to more effectively respond to challenges from other major retailers, enhancing its market share.
- Shifting Consumer Behavior: With evolving consumer demands for price and convenience, Walmart's omnichannel strategy aims to address these needs, thereby increasing customer loyalty and purchase frequency.
See More
Inflation Expectations Shift Impacting Market Valuations
- Inflation Expectation Changes: The shifting inflation expectations are prompting adjustments in market growth forecasts, which could lead to a reevaluation of sector valuations, thereby influencing investor decisions and market dynamics.
- Fed Policy Impact: The Federal Reserve's 'higher-for-longer' stance on interest rates increases the holding risks associated with debt, particularly long-duration debt, necessitating a reassessment of portfolio duration risk to mitigate potential interest rate fluctuations.
- Role of Discount Retailers: Discount retailers may serve as key indicators of consumer confidence, as changes in consumer spending patterns will be reflected in their performance, making it essential for investors to monitor these companies for broader economic signals.
- Portfolio Adjustment Recommendations: Given the current economic landscape, investors should consider adjusting their portfolios to adapt to evolving market conditions, especially in light of the uncertainties surrounding inflation and interest rate expectations, making timely market insights crucial.
See More
Walmart Enhances Delivery Capabilities to Strengthen Competitive Edge
- Delivery Capability Upgrade: Walmart's enhancements to its delivery and mobile ordering systems significantly improve everyday shopping convenience, optimizing the balance between price, convenience, and delivery options for consumers, thereby strengthening its market competitiveness.
- Market Strategy Comparison: Unlike Walmart's price competition strategy, Target is focusing on enhancing the high-end in-store experience, attempting to attract consumers through differentiated services, although this may place it at a disadvantage in price competition.
- Omnichannel Capability Reshaping: Walmart's omnichannel capabilities are reshaping how consumers shop, particularly among major retailers, as shoppers increasingly prioritize convenience and delivery options, which could impact Target's market share.
- Investor Attention: Although Target did not make it onto The Motley Fool's list of top stocks, Walmart's ongoing innovation and market adaptability may draw more investor interest in its stock performance.
See More
Impact of Higher Interest Rates on Consumer Staples and Discount Retailers
- Sector Impact: Higher interest rates could position consumer staples and discount retailers as safe havens amid household budget pressures, indicating potential resilience in these sectors during economic uncertainty.
- Inflation Expectations Shift: Changing inflation expectations and a prolonged Fed rate path may reshape market valuations, duration risk, and sector leadership, influencing investor decisions and market dynamics.
- Role of Discount Retailers: Discount retailers may serve as key consumer barometers, reflecting trends in household budget constraints and providing critical market signals for investors.
- Investment Recommendations Update: While Walmart remains a significant investment option, analysts have identified ten stocks with greater potential for substantial returns in the coming years, prompting investors to reassess their portfolios.
See More
Investment Choices in Home Improvement Market Analysis
- Lowe's Performance Overview: In fiscal 2025, Lowe's achieved revenue of $86 billion, reflecting a growth of approximately 3%, with a net income of about $6.7 billion and a net margin of 7.7%, indicating its stability and profitability in the home improvement market.
- Home Depot Highlights: Home Depot reported nearly $165 billion in revenue for 2025, growing around 3.2%, with a net income of approximately $14.2 billion and a net margin of 8.6%, showcasing its strong performance and profitability in the market.
- Competitive Risk Analysis: Lowe's faces intense competition from retail giants like Walmart and Amazon, with its performance heavily reliant on the health of the housing market and consumer spending, while Home Depot is sensitive to high interest rates that may slow down large renovation projects.
- Valuation Comparison: Lowe's forward P/E ratio stands at 17x, lower than Home Depot's 20.7x, and its P/S ratio is 1.4x compared to Home Depot's 1.9x, indicating a more attractive value proposition and growth potential moving forward.
See More
Walmart's Growth Slows, Stock Faces Pressure
- Sales Growth Slows: Walmart's U.S. comparable-store sales grew by 4.1% in the latest quarter, but operating income only rose by 5% due to rising fuel costs, which would have otherwise led to a 7.5% increase, indicating a struggle for growth under cost pressures.
- AI Investment Yields Results: Walmart's ongoing investments in artificial intelligence and automation have paid off, with its AI shopping assistant Sparky seeing weekly active users double quarter-over-quarter, and these users ordering 35% more than regular customers, showcasing significant advancements in customer experience and operational efficiency.
- Consumer Spending Pressure: CFO John Rainey noted that while high-income customers are spending confidently across categories, lower-income consumers are becoming more budget-conscious, as evidenced by the drop in average gallons filled at fuel stations falling below 10 for the first time since 2022, reflecting increased financial stress among consumers.
- High Valuation Risks: Despite Walmart's stable market performance, its staggering price-to-earnings ratio of 41.5 times and a dividend yield of only 0.8%, lower than the S&P 500's 1.1%, raises concerns for risk-averse investors about the sustainability of its premium valuation amidst slower growth prospects.
See More
Walmart Upgrades Omnichannel Capabilities Reshaping Retail Landscape
- Omnichannel Enhancement: Walmart's upgraded omnichannel capabilities are reshaping how consumers balance price, convenience, and delivery options, thereby strengthening its position in a highly competitive retail market.
- Competitive Comparison: Walmart's strategy contrasts sharply with Target's experience-driven approach, highlighting Walmart's flexibility and adaptability in meeting diverse consumer needs.
- Intensified Market Competition: As competition in the retail sector intensifies, Walmart's omnichannel upgrades enable it to more effectively respond to challenges from other major retailers, enhancing its market share.
- Shifting Consumer Behavior: With evolving consumer demands for price and convenience, Walmart's omnichannel strategy aims to address these needs, thereby increasing customer loyalty and purchase frequency.
See More
Inflation Expectations Shift Impacting Market Valuations
- Inflation Expectation Changes: The shifting inflation expectations are prompting adjustments in market growth forecasts, which could lead to a reevaluation of sector valuations, thereby influencing investor decisions and market dynamics.
- Fed Policy Impact: The Federal Reserve's 'higher-for-longer' stance on interest rates increases the holding risks associated with debt, particularly long-duration debt, necessitating a reassessment of portfolio duration risk to mitigate potential interest rate fluctuations.
- Role of Discount Retailers: Discount retailers may serve as key indicators of consumer confidence, as changes in consumer spending patterns will be reflected in their performance, making it essential for investors to monitor these companies for broader economic signals.
- Portfolio Adjustment Recommendations: Given the current economic landscape, investors should consider adjusting their portfolios to adapt to evolving market conditions, especially in light of the uncertainties surrounding inflation and interest rate expectations, making timely market insights crucial.
See More
Walmart Enhances Delivery Capabilities to Strengthen Competitive Edge
- Delivery Capability Upgrade: Walmart's enhancements to its delivery and mobile ordering systems significantly improve everyday shopping convenience, optimizing the balance between price, convenience, and delivery options for consumers, thereby strengthening its market competitiveness.
- Market Strategy Comparison: Unlike Walmart's price competition strategy, Target is focusing on enhancing the high-end in-store experience, attempting to attract consumers through differentiated services, although this may place it at a disadvantage in price competition.
- Omnichannel Capability Reshaping: Walmart's omnichannel capabilities are reshaping how consumers shop, particularly among major retailers, as shoppers increasingly prioritize convenience and delivery options, which could impact Target's market share.
- Investor Attention: Although Target did not make it onto The Motley Fool's list of top stocks, Walmart's ongoing innovation and market adaptability may draw more investor interest in its stock performance.
See More
Impact of Higher Interest Rates on Consumer Staples and Discount Retailers
- Sector Impact: Higher interest rates could position consumer staples and discount retailers as safe havens amid household budget pressures, indicating potential resilience in these sectors during economic uncertainty.
- Inflation Expectations Shift: Changing inflation expectations and a prolonged Fed rate path may reshape market valuations, duration risk, and sector leadership, influencing investor decisions and market dynamics.
- Role of Discount Retailers: Discount retailers may serve as key consumer barometers, reflecting trends in household budget constraints and providing critical market signals for investors.
- Investment Recommendations Update: While Walmart remains a significant investment option, analysts have identified ten stocks with greater potential for substantial returns in the coming years, prompting investors to reassess their portfolios.
See More
Investment Choices in Home Improvement Market Analysis
- Lowe's Performance Overview: In fiscal 2025, Lowe's achieved revenue of $86 billion, reflecting a growth of approximately 3%, with a net income of about $6.7 billion and a net margin of 7.7%, indicating its stability and profitability in the home improvement market.
- Home Depot Highlights: Home Depot reported nearly $165 billion in revenue for 2025, growing around 3.2%, with a net income of approximately $14.2 billion and a net margin of 8.6%, showcasing its strong performance and profitability in the market.
- Competitive Risk Analysis: Lowe's faces intense competition from retail giants like Walmart and Amazon, with its performance heavily reliant on the health of the housing market and consumer spending, while Home Depot is sensitive to high interest rates that may slow down large renovation projects.
- Valuation Comparison: Lowe's forward P/E ratio stands at 17x, lower than Home Depot's 20.7x, and its P/S ratio is 1.4x compared to Home Depot's 1.9x, indicating a more attractive value proposition and growth potential moving forward.
See More
