Why Walmart Stock's a Buy After Its Beat-And-Raise Quarter

Salinas, United States - April 8, 2014: Walmart store exterior.. — (Image credit: Getty Images)

Walmart (WMT) is the best Dow Jones stock Tuesday after the retail giant beat top- and bottom-line expectations for its fiscal 2025 third quarter and raised its full-year outlook.

In the three months ended October 31, Walmart's revenue increased 5.5% year over year to $169.6 billion, including a 27% jump in global e-commerce sales. Its earnings per share (EPS) improved 13.7% from the year-ago period to 58 cents. At Walmart U.S. and Sam's Club, comparable-store sales rose 5.1% and 3.7%, respectively, excluding fuel.

"We had a strong quarter, continuing our momentum," said Walmart CEO Doug McMillon in a statement. "In the U.S., in-store volumes grew, pickup from store grew faster, and delivery from store grew even faster than that."

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The results beat analysts' expectations. Wall Street was anticipating revenue of $167.7 billion and earnings of 53 cents per share, according to Yahoo Finance.

As a result of its performance in the first nine months of the year, Walmart raised its full-year outlook. The company now expects to achieve revenue growth in the range of 4.8% to 5.1% and EPS between $2.42 to $2.47. This is up from its previous outlook for revenue growth in the range of 3.75% to 4.75% and earnings per share of $2.35 to $2.43.

"Our teams are executing and delighting our customers and members with the value and convenience they expect from Walmart," McMillon said.

"The company is simply a juggernaut. This quarter was the epitome of what type of company WMT is trying to become as the strong beat and rise was driven by omni-channel momentum," says David Wagner, portfolio manager at Aptus Capital Advisors. "This industry is starting to become more bifurcated between the 'has beens' and the 'winners' and WMT, alongside Amazon (AMZN) and Costco (COST), are biggest winners as they've skated to where the puck is going in the retail space."

Is Walmart stock a buy, sell or hold?

Walmart has turned in a stellar performance on the price charts, up 67% for the year to date on a total return basis (price change plus dividends). This easily outperforms the S&P 500's total return of 25%. Unsurprisingly, Wall Street is bullish on the blue chip stock.

According to S&P Global Market Intelligence, the average analyst target price for WMT stock is $87.64, representing implied upside of just over 2% from current levels. Additionally, the consensus recommendation is Buy.

Financial services firm Jefferies is one of the most bullish outfits on the consumer staples stock with a Buy rating and a Street-high $100 price target.

"WMT is scaling its investments in tech and e-commerce, and continued price investment has positioned it for future share gains," said Jefferies analyst Corey Tarlowe in a November 15 note. "Overall, we expect WMT to command an increasingly large share of customer spending through bolstered omnichannel capabilities, partnerships, and services. This justifies above-historical-average growth."

Joey Solitro is a freelance financial journalist at Kiplinger with more than a decade of experience. A longtime equity analyst, Joey has covered a range of industries for media outlets including The Motley Fool, Seeking Alpha, Market Realist, and TipRanks. Joey holds a bachelor's degree in business administration.