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Author: Alan LittleDate: 2021-10-20

Walmart (WMT) +2% after Goldman adds retailer to ‘conviction list’

Walmart (WMT) traded higher on Tuesday after Goldman Sachs said that the retailer is a top buy heading into a potentially lucrative 12 months.

Walmart (WMT) shares rose 2.08% on Tuesday after Goldman Sachs (GS) added the largest US retailer to its highly rated ‘conviction list’, while removing rival Target (TGT) at the same time.

Goldman analyst Kate McShane believes that Walmart is on track to consistently grow its earnings before tax and will benefit from its myriad of investments during the next 12 months.

The Arkansas-headquartered company has already been a big winner during the pandemic, with low interest rates and fiscal subsidies for consumers driving sales of a range of both affordable and more expensive goods.

Goldman said that the pandemic bounce has now eased slightly for Walmart, but noted that some consumer habits have strengthened and that demand for certain goods remains elevated.

Walmart recently announced that it will bring in 150,000 additional employees over the busy Christmas period to cope with demand.

“After the recent stock underperformance as we think the company is in a position to take share and do it more profitably into 2022,” McShane added.

She closed out her update on Walmart by setting a higher $184 price target, which is well above its current trading performance.

The positive coverage from Goldman follows an equally bullish appraisal by Bank of America (BAC), which also came out in support of Target and Amazon (AMZN).

Goldman does not echo those sentiments for Target right now after removing the retailer from its conviction list, though its new buy rating is not a major downgrade.

Walmart shares traded up after the upgrade in New York on Tuesday, with the 2.08% advance by mid-afternoon setting a $144.63 price.

Target went in the opposite direction, easing 0.36% lower to $252.74.

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