KeyBanc Capital initiates Walmart, Target coverage with overweight ratings

KeyBanc Capital Markets analysts on Wednesday said Walmart Inc. WMT, +0.38% and Target Corp. TGT, +0.91% appear to be well positioned to weather the current economic environment and grow profit margins. Analysts at KeyBanc initiated coverage of Walmart and Target with overweight ratings and price targets of $155 and $200 respectively. “While investors can find better growth potential in smaller companies, we believe both Walmart and Target are in the best competitive positioning of the past decade, given the pandemic’s catalyst of e-commerce becoming significantly more important,” KeyBanc analyst Bradley B. Thomas said. The two companies are also poised to gain market share in the next two-to-three years as they leverage their grocery delivery/pickup businesses. Analysts also expect their profit margins to recover to normal levels. Shares of Walmart are down 6.6% in 2022 compared to a loss of 17.5% by the S&P 500 SPX, +0.51%. Target stock is down 28.2% in 2022.