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Walmart stock receives upgrade amid improvements to in-store traffic, grocery purchases

Evercore analysts upgrade Walmart shares to an Outperform rating as the mega-chain sees improvements in the retail landscape.

Video Transcript

- And that's Walmart. Evercore upgrading to outperform, touting the retail giant's scale and stability. Now, they also say that Walmart has gotten a hold of its 2022 inventory problems and views those issues of the past.

Now, store traffic has also been trending to the upside. While it's still below those prepandemic levels, it's actually been increasing for seven quarters in a row right now. And success at Sam's Club is another thing that was called out in this report here by Evercore, with Evercore saying that the Club is building some of those loyalty brands that we know that is so important here for Sam's Club through its membership.

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It also thinks that it's going to continue to outperform as inflation remains sticky, at least for right now. So new price target $160-- still plenty of upside to go, at least Walmart thinks so. And it makes sense in this environment.

JOSH SCHAFER: Yeah, there was a lot of positives in that note. They also pointed to web traffic, which is above prepandemic levels, above 2019, above 2020, a little bit lower than the last couple years, probably because more people are going back to the store.

And another interesting graph in there, Dave, that kind of caught my eye was the groceries. We talked about that a lot at Walmart's-- after Walmart's last earnings. But groceries now for four quarters in a row, double-digit growth. It'll be interesting to see if that keeps going up because that is something that Walmart has that some of these other--

- That the others don't, yeah.

JOSH SCHAFER: --some of-- yeah, some of their competitors don't have when you talk about people trading down and buying groceries at Walmart.

- And backing up the narrative, the National Retail Federation yesterday said they estimate retail sales increasing 4% to 6% this year. That is above the prepandemic average of 3.6%. But we'll get a better glimpse of Walmart investor day on April 4 and 4. That's next week.