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Walmart Inc (NYSE: WMT) has already gained about 13% over the past two months but a Jefferies analyst is convinced it is not out of room to run just yet.

Walmart stock could climb to $195

Corey Tarlowe reiterated his “buy” rating on the big box retailer this morning and raised his price target to $195 – up more than 15% from here.

The analyst is bullish because he expects artificial intelligence to be a meaningful benefit for Walmart stock. His research note reads:

 

We believe innovations in automated distribution, advertising, shrink reduction, and freight optimization could generate $20 billion plus of incremental EBIT by FY’29.

Note that John David Rainey – the chief financial officer of Walmart Inc also said in November that the omnichannel strategy was working and he was satisfied with the company’s competitive position.

Walmart to beat sales estimates in Q4

Walmart is scheduled to report its financial results for the fourth quarter on February 20^th. Consensus is for it to earn $1.63 a share versus $1.71 per share a year ago.

The Jefferies analyst is confident that Walmart will come in modestly above the sales estimates in its to-be-reported quarter and “guide fiscal 2025 conservatively given possibility inflation continues slowing”.

Walmart stock currently pays a dividend yield of 1.34% that makes up for another good reasons to have it in your investment portfolio.

#basicincome. First time I saw an automated floor cleaner making its rounds in our Walmart. It's coming. More job losses due to automation!!

— spicytuna (@spicytu29171295) February 3, 2024

In his research note, Corey Tarlowe also raised his price objective on Target Corp (NYSE: TGT) to $170 a share on Thursday.

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