Image Source: Mike Mozart, Flickr

The recent pullback in shares of Walmart Inc (NYSE: WMT) is an opportunity to invest in a quality name at a discount, says Oliver Chen – a TD Cowen analyst.

Walmart stock could climb to $188

Chen reiterated his “outperform” rating on the retail behemoth this morning and said its shares could climb to $188 – up roughly 25% from here.

The analyst dubbed Walmart stock a retail-tech leader and added it to his list of best ideas for 2024 on Tuesday. His research note reads:

We see general merchandise … as an opportunity ahead as we see a current tug-of-war between needs vs. wants as budget conscious consumers continue to prioritise everyday value and low price.

Last month, Walmart Inc reported market-beating results for its third financial quarter.

Why else is Chen bullish on Walmart stock?

Oliver Chen likes the chain of hypermarkets because it continues to add members to Walmart Plus at an impressive pace.

The analyst is bullish on Walmart Inc. also because he expects the retail behemoth to sustain growth in digital advertising at a double-digit percentage.

Walmart gaining share on Search relative to Amazon, Google and others. Also worth noting YouTube, Instagram and TikTok growing, as well. pic.twitter.com/9e4cGnqhE8

— Reid Jackson (@reidjjackson) April 18, 2023

The New York-listed firm is seeing continued momentum in grocery category and health & wellness – and it’s wining higher income traffic while keeping its share in lower and middle incomes as well. These factors also contributed to Chen’s constructive view on $WMT.

Note that Walmart stock currently pays a dividend yield of 1.51% which makes up for another great reason to have it in your investment portfolio.  

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