Is it too late to invest in Walmart stock as it hits a record high? here’s what experts are saying

Walmart Inc (NYSE: WMT) rallied into record territory this morning after reporting a strong third quarter as US customers remain resilient heading into the holiday season.

Still, Scott Mushkin of R5 Capital continues to see further upside in WMT as it’s “taking an enormous amount of share” that helped push its US comparable-store sales up a better-than-expected 5.3% in Q3.

Walmart stock currently pays a dividend yield of 0.95% which adds to the list of reasons to own it for the long term as well.

Is Walmart stock overvalued at $88?

Scott Mushkin agreed that Walmart stock is expensive compared to its peers at writing.

But he reiterated the retail name as a “top pick” as it could unlock further upside as margins continue to expand moving forward.

“There’s room for the company to expand its margins,” he told CNBC in an interview today.

WMT improved its consolidated gross margin rate by 21 basis points in the recently concluded quarter.

Shares of this multinational may be worth owning also because advertising is proving to be quite lucrative for it. Revenue from that segment was up 28% on a year-over-year basis in the third quarter.

The continued increase in global e-commerce sales further suggests it’s now on the same path as Amazon and, therefore, could command a premium multiple moving forward.

BMO sees upside in WMT shares to $100

Analysts at BMO Capital are keeping bullish on Walmart stock for similar reasons as well.

The investment firm maintained its “outperform” rating ahead of the retailer’s earnings release and raised its price target to $100 which translates to about a 14% upside from here.  

BMO is fully convinced that the company’s omnichannel investments over the past decade are currently in the initial stages of paying off only.

WMT could push further to the upside as it continues to win share across all income cohorts, as per the analysts.

Note that Walmart is beta-testing an AI-enabled shopping assistant that positions it also to benefit from the artificial intelligence-related tailwinds.

Walmart stock gains on raised future guidance

Walmart executives are bullish on what the future holds for the company as well.

They raised the full-year guidance this morning from up to $2.43 of per-share earnings (adjusted) to up to $2.47 in 2024.

WMT now expects its net sales to jump another 4.8% this year at least versus the 3.75% it had guided for earlier.  Dough McMillon – the chief executive of Walmart told investors in a press release today:

We had a strong quarter, continuing our momentum. Our teams are executing and delighting our customers and members with the value and convenience they expect from Walmart.

Walmart shares are now up close to 65% versus the start of 2024.

The post Is it too late to invest in Walmart stock as it hits a record high? here's what experts are saying appeared first on Invezz