The retail industry is in a period of tremendous change, and Walmart, the world’s largest brick-and-mortar retailer, is among the companies that has the most at stake. Walmart’s success depends on its ability to respond to the disruptors emerging in the retail universe, from eCommerce to sharing-economy startups. Investors and analysts are all watching to see how Walmart will fare in the months and years ahead, and what estimated financial performance can be expected.
In this article, we’ll look at the expectations of analysts from various industries who cover Walmart, and what various sources have published about the retailer’s prospects for the future.
Short Term Outlook
In the short term, Walmart’s prospects are mostly promising. Analysts expect Walmart to extend its lead in the brick-and-mortar retail sector, with a few exceptions.
One short-term concern analysts have is the potential impact of tariffs on Walmart’s merchandise. Walmart’s revenue has grown around 3 percent in recent quarters, but the company has warned that proposed tariffs on Chinese imports could take a toll on its bottom line.
Analysts also point to Walmart’s plans to spend billions of dollars to close stores and invest in technology to try and catch up with Amazon as a possible drag on its performance in the near term.
Long-Term Growth Outlook
Walmart has made it clear that it’s embracing the digital age and investing heavily in tech to maintain its edge in retail. Analysts expect that this will ultimately lead to more success for the company in the long term.
Some of the investments Walmart is making to stay ahead include buying stakes in India-based Flipkart, investing in artificial intelligence and robotics, and launching new online tools to enhance customer service.
Analysts also expect Walmart to benefit from the growth of digital payments, which has seen the company add more than 30 million customers to its network in the last two years.
But perhaps the biggest factor that will determine Walmart’s long-term success will be its ability to capitalize on its vast physical infrastructure to better compete with Amazon and its superior delivery times. Analysts point out that Walmart will have to leverage its more than 8,000 stores in the U.S. to compete in the future.
Analysts Weigh In
A number of analysts from various industries have weighed in on Walmart’s prospects for the future.
Brian Sozzi, chief executive of Belus Capital Advisors, noted that Walmart is “in a sweet spot” in terms of its capital position, ability to invest in technology, and overall financial performance.
Van Saulov, an analyst at Yali Capital, commented on the potential impact of tariffs on Walmart’s bottom line, saying that despite the potential near-term headwinds, the company has shown a commitment to “building a stronger and more competitive supply chain network.”
Wu Peng, an analyst at Morningstar Investment Services, noted that Walmart has a “unique business model” with “low-cost operations, powerful e-commerce capabilities, and deep, fundamental relationships with suppliers and customers.”
Key Takeaways
Based on the opinions of analysts from various industries, the following can be concluded about Walmart’s expectations for the future:
• Walmart’s near-term prospects are mostly promising, although the potential impact of tariffs on merchandise could hamper performance in the short-term.
• Walmart is investing heavily in technology to stay ahead and embrace the digital age, which analysts expect to result in long-term success for the company.
• Walmart’s ability to capitalize on its impressive physical infrastructure to better compete with Amazon and its superior delivery times will be a major factor in its long-term success.
• Analysts agree that Walmart’s performance relies heavily on its “low-cost operations, powerful e-commerce capabilities, and deep, fundamental relationships with suppliers and customers.”