Walmart Inc (WMT  ) is among the stocks heading towards the trillion-dollar club.

The stock is a mix of "defense and offense" on both revenues and profits, amid a soft consumer backdrop with high uncertainty in the back half of 2024, according to JPMorgan.

The Walmart Analyst: Christopher Horvers upgraded the rating for Walmart from Neutral to Overweight, while raising the price target from $66 to $81.

The Walmart Thesis: The company is poised for multi-year double-digit earnings growth, driven by "market share gains, rising alternative profit pool benefits, and International segment profit inflection," Horvers said in the upgrade note.

The analyst mentioned four reasons for the upgrade:

  • Walmart has US topline tailwinds, "including a consumer that is highly value oriented, the prospect for modest grocery reflation while CPG/grocery brands lean into driving unit volumes, especially at WMT, and gen merch share gains persisting on expanded 3P capabilities," he said.
  • An accelerating alternative profit pool contribution in the US, which is now around 80% of operating profits, with segment margins expected to reach 6% in three years
  • An inflection in profitability in the company's International business, which is so far underappreciated.
  • "Our desire to add more defensiveness to our ratings given signs of softening discretionary spending," he further wrote.
WMT Price Action: Shares of Walmart had declined by 0.82% to $69.82 at the time of publication on Thursday.