Walmart shares hit all-high following Credit Suisse upgrade

Walmart, the world’s largest retailer, has been a rare bright spot in a cataclysmic market, with shares rallying to new record highs following an upgrade.

On Wednesday morning, Credit Suisse upgraded Walmart’s (WMT) stock to outperform from neutral, boosting its price target for the big-box retailer to $127 per share, up from the prior target of $115, reflecting “a more defensive near-term view on U.S. retail amid COVID-19 concerns.” 

Shares climbed as high as $128.08. They were last trading around $122, up more than 2.5% from Tuesday’s closing price of $119.26. 

In a research note, Credit Suisse’s team of equity analysts led by Seth Sigman, made a case that the boost in traffic at Walmart will be more than a “more than a short-term pantry load” as people stock up on supplies in anticipation of staying at home for an extended period of time in an attempt to flatten the curve of the spread of the virus. Instead, what the Credit Suisse analysts expect is an “accelerating structural change” in the way people shop, especially as consumers adopt Walmart’s online grocery pickup and delivery.

“We see this unfortunate period accelerating structural changes in consumer shopping, possibly by 5+ years, as they are introduced to new retailers and new shopping methods [including] online grocery and delivery, and further consolidate purchases at multi-category, multi-channel retailers. This change should be stuck, and favor [Walmart], as it’s invested in its infrastructure, technology and people, to evolve its model,” Sigman wrote in a note. 

Display baskets are nearly empty in the produce section of a Walmart in Warrington, Pa., Tuesday, March 17, 2020. Concerns over the new coronavirus have led to consumer panic buying of grocery staples in stores across the country. (AP Photo/Matt Rourke)

Walmart has become a growing force in Internet retail, with much of that growth derived from its aggressive rollout of online grocery pickup and delivery. Last quarter, Walmart’s e-commerce sales skyrocketed by 35%, boosted by the grocery category.

Walmart, which has seen high demand for paper products and cleaning supplies lately, has said that many of its customers are “taking advantage” of these omnichannel services. 

Walmart offers online grocery pickup at 3,200 locations and delivery at 1,600 locations across its fleet of nearly 4,700 U.S. stores. Approximately 90% of the U.S. population lives within 10 miles of a Walmart store. 

Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.

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