Analysts at Bank of America reinforced their Buy rating on Walmart Inc. (NYSE:WMT), showcasing confidence in the retail giant’s long-lasting value, omni-channel growth, and increasing profitability.

1. Unmatched Convenience and Same-Day Delivery

• Household Reach: Walmart’s same-day delivery service now encompasses 76% of U.S. households, with plans to extend this to 95% before the year’s end.

• Speed Innovations: Innovations such as curbside pickup and last-mile drone deliveries continue to shorten delivery times, providing Walmart with a competitive edge against e-tailers and grocery chains.

2. E-Commerce Leader

• 20%+ Growth: Walmart’s online sales are growing at over 20% per year, contributing to half of total net sales growth.

• AI & Automation: The introduction of the “Sparky” AI assistant and enhanced fulfillment-center robotics has boosted conversion rates and lowered fulfillment costs.

3. Strength in International Markets

• Sam’s Club China: Average delivery times have decreased to 46 minutes.

• Flipkart (India): The service has achieved a record 3-minute delivery time, setting benchmarks globally.

4. Margin Expansion Through New Verticals

• Digital Advertising: Walmart is rapidly scaling its higher-margin ad sales to leverage its customer base of 150 million weekly shoppers.

• Third-Party Marketplace: Value-added services and seller fees are increasing gross merchandise volume without heavy reliance on inventory.

• Wage Investments: Walmart’s strategic wage increases have improved employee retention and service quality, complemented by automation-driven productivity gains.

5. Valuation and Risk Assessment

• $120 Price Target: This target represents a 41x multiple on Bank of America’s FY27 EPS estimate of $2.90, underlining Walmart’s strong comps and free cash flow generation.

• Risks: Potential challenges include margin pressure from pharmacy reimbursement issues and food price deflation. Nevertheless, strong scale, efficient supply chains, and tech investments support Bank of America’s outlook.