[Click e-Stock] "Walmart, From Defensive Stock to Tech Growth Stock"

On December 18, IBK Investment & Securities evaluated Walmart, noting that while consumption among low-income groups continues to weaken, the company is transitioning from a defensive stock to a growth stock through its shift to an artificial intelligence (AI)-based platform and expansion of market share. The average target price was set at $119.95, with the highest target price at $136.

Walmart, which boasts the largest market share in the U.S. grocery sector, has recently attracted significant attention by transferring its listing to Nasdaq for the first time in 53 years since its debut on the New York Stock Exchange in 1972. Operating offline stores and warehouse clubs in the United States, Canada, China, and India, Walmart is also focusing on digital transformation through its website and mobile app, aiming to evolve from a traditional retailer into an e-commerce company.

Cho Kyungjin, a researcher at IBK Investment & Securities, stated, "Walmart is enhancing internal operational efficiency by introducing AI systems across its business, including inventory management, demand forecasting, and logistics and supply chain automation." He added, "Externally, through a partnership with OpenAI, the company is offering a service that allows customers to purchase products such as Sam's Club packaged foods and apparel directly through the ChatGPT interface." The analysis suggests that Walmart is ahead of its competitors in digital transformation, and mid- to long-term improvements in productivity and profitability are expected as a result of AI adoption.

In the third quarter, Walmart reported revenue of $179.5 billion (up 5.9% year-on-year) and earnings per share (EPS) of $0.62, both exceeding market expectations (revenue of $177.4 billion and EPS of $0.60). Notably, online sales and advertising revenue grew by 27% and 53%, respectively.

Researcher Cho noted, "A significant inflow of high-income customers has been observed, and price competitiveness is strengthening amid tariffs and rising prices." He added, "Given the stable earnings growth, the turnaround to profitability in e-commerce, and the structural transformation in advertising driven by the acquisition of Vizio, this could be a phase where valuation concerns are alleviated."