Analyst Note| Zain Akbari, CFA |
Despite increasingly difficult comparisons, wide-moat Walmart saw strong fiscal 2022 first-quarter performance, with 3% revenue expansion spurred by growth in all channels and rising general merchandise sales. This should lead us to lift our near-term targets and our $124 fair value estimate by a mid-single-digit percentage. We attribute the results to transitory pandemic-related volatility and still expect low-single-digit sales growth and 4%-5% adjusted operating margins long-term. We suggest investors await a more attractive entry point, considering near-term volatility and intensifying competition.