It was only a matter of time when Walmart stock will reset its new historical high. It was detected on February 20 at $181.35, less than a week before a 3:1 split meaning the stock price was reduced to one-third of its previous levels. This corresponds to $60.45 in a new format. The price edged slightly higher to a $61.5 area, using a residual upside momentum after the Christmas quarter report, yet this was not a real breakthrough towards the next range. And now Walmart soared to above $64 after adding 7% to its market value in a singe day of May 16. A big step for the US largest chain of economy hypermarkets, which may also prompt more smaller steps for the whole retail segment in the near future.

A background and the major reason was that the giant company's  Q1 report demonstrated impressive sales growth, also with a good view to the rest of the year. Reaching consolidated revenue of $161.5 billion vs consensus number of $159.57 billion for the quarter, Walmart business declared a 6% YoY surplus, or 5.8% in constant currency calculations, while keeping intact its previously bullish signs on marginality, as its operating income added 9.6% to touch a $600 million landmark. The so-called adjusted operating income (after taking out all operating expenses like cost of goods sold, wages, depreciation etc) was up 13.7%. Continued increase in loyalty membership helped a lot.

Walmart is often perceived as a very big place where everyone walks around a huge trading floor, collecting goods in baskets. However, its e-Commerce segment was up 21%, supported well by store-fulfilled pickup and deliveries. Besides, its global ad business grew 24%. Inventories were unloaded by 2.7%, including a 4.2% drop in US Walmart stores. A commitment to frugality, spending less and sticking to a budget is what actually matters in the new reality after many inflation spikes over the last few years, and Walmart management skilfully uses the situation for the sake of its own and its customers at the same time.

The company emphasised a positive outlook for the current quarter which started in April, and it also updated the fiscal year of 2025 estimates to the upside. Even though specific numbers for the future periods were not detailed enough during the conference call, Walmart CEOs set a bullish tone for the stock's dynamics, after promising to strengthen AI features influence on sales (which I already described a lot in my February post) and bolstering its online sales attractiveness and infrastructure.

As it usually happens in such cases, some minor price adjustment is possible after the initial one-day spike to the new absolute record, yet even an update of previous price targets for Walmart by many investment houses to the levels above $70 looks too modest. I think, most of them would keep their Buy ratings even after this area would be touched, so that I feel more reasonable to have my personal expectations for more realistic targets (or one may call it dream targets) between $75 and $82.5 to approach the vicinity of the next two psychological barriers around $225 and $250, if we try to use the old-styled system of Walmart share price calculation (which would be actual if no split would happen).