Walmart Was a Pandemic Winner. How It Can Keep the Momentum in 2021.
As the year drew to a close, we took a look at all 30 stocks in the Dow Jones Industrial Average, starting with the worst performers—
Walgreens Boots Alliance
—and working our way up to the highest-flying stock in the benchmark—Apple.
As a major essential retailer, Walmart didn’t have to close when coronavirus-related lockdowns began in earnest in March; instead, it benefited from shoppers stocking their pantries amid the initial panic. That pattern held even when many regions lifted restrictions in the summer, as the company’s growing online sales and curbside pickup resonated with consumers.
Yet while the pandemic gave Walmart a major leg up, it was hardly the company’s only area of focus. Walmart has continued to evolve, diversifying its revenue streams by expanding beyond its core retail segment and zeroing in on higher-growth parts of its business.
The company is hoping to be a partial owner in social media app TikTok as it looks to attract younger shoppers online, while it also launched subscription service Wamart+ , which—much like its recent partnership with
(SHOP)—is a shot across the bow at
(AMZN). The company has been moving further into both human and animal health, while its overseas investments like Indian e-commerce firm Flipkart have worked out well. Some analysts hypothesize that advertising could even be a key new catalyst.
In 2021, investors will certainly be fixated on how well Walmart can hang onto its pandemic-boosted market share. The stock has already reacted poorly when investors feared it was losing momentum, and metrics like same-store sales and digital growth will continue to be in the spotlight next year, as the market tries to gauge how much of Walmart’s gains are permanent.
Analysts are certainly confident that the shares will keep rallying: More than 80% of the 32 analysts tracked by FactSet have a Buy rating or the equivalent on Walmart, while just two are bearish. The average analyst price target is $167.42.
The next potential catalyst for Walmart could be any update it provides next month about the holiday shopping season, followed by its fiscal fourth-quarter earnings report, due out in mid-February.
Write to Teresa Rivas at firstname.lastname@example.org
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