Bank of America Gives Walmart Buy Rating, Highlights $150B Digital Growth
Bank of America reinstated Buy rating on Walmart, noting sustained market-share gains across income cohorts and a $150 billion digital business that accounts for 21% of sales and grows at a 23% two-year CAGR. The firm forecasts e-commerce profitability with 10–15% incremental margins to drive earnings momentum and support higher valuations.
1. BofA Reinstates Buy Coverage on Walmart
Bank of America reinstated coverage on Walmart with a Buy rating, citing sustained market-share gains across income cohorts driven by everyday low pricing for value-focused consumers and faster delivery offerings that attract higher-income shoppers.
2. Robust Digital Business Growth
Walmart’s digital segment reached $150 billion, representing 21% of total sales and growing at a two-year CAGR of 23%, underpinned by investments in fulfillment centers, technology upgrades and enhanced delivery options.
3. E-commerce Profitability and Margins
The firm projects e-commerce incremental margins of 10–15% as online sales scale, driving margin expansion and supporting earnings momentum through operating efficiencies and higher transaction volumes.
4. Positive Outlook for Valuations
Continued sales growth and accelerated profit contributions from digital and store investments are expected to prompt upward EPS revisions, paving the way for a higher valuation multiple over the medium term.