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Walmart is on the verge of an earnings beat that could see the stock gain nearly 12%, according to Evercore ISI. The firm added the retail behemoth to its tactical outperform list with an updated $180 price target, up from $173. Walmart will report quarterly results Thursday before the opening bell, and analysts polled by FactSet are forecasting $1.70 per share for its fiscal second quarter. Walmart stock has added nearly 14% so far this year, and shares hit a 52-week high of $162.78 in trading Monday. WMT YTD mountain Walmart stock has climbed roughly 13.6% from the start of the year. Evercore analyst Greg Melich said Walmart will likely surpass consensus estimates, with a particular focus on store traffic trends, market share capture as well as a rebound for margins despite an overall retail slowdown. “While we don’t think WMT has entirely bucked the broader Retail deceleration trend (i.e. a 150-300bp slowing for many), traffic trends appear resolute for Walmart based on our analysis of Household penetration/frequency from [data provider] Numerator, Web Traffic, and HundredX spend intention survey data,” Melich said. He added that Walmart likely benefited throughout the quarter from the demise of Bed Bath & Beyond, while also picking off customers from peer retailer Target . The analyst also posits that full-year earnings per share could climb close to $6.50 and eclipse $7 in 2024, which supports the idea that shares are headed to $170 per share as a “next stop” after quarterly results. “It’s the stickiness of the customer traffic that gives us confidence that the turn at Walmart is for real,” Melich said. “Over the medium term, alternative profit streams, supply chain autonomation, and store-revamping provide upside to global EBIT margin which appears to have hit trough in 2022 at 4.9%.” — CNBC’s Michael Bloom contributed to this report.
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