Look up, look down, Walmart (WMT) is all around.
First, we’ll go high.
The world’s largest retailer, which has a store within 10 miles of 90% of the U.S. popuation, recently said it would expand its drone delivery service through Alphabet-owned (GOOGL) Wing. The expansion will reach customers from 100 stores in Atlanta, Charlotte, Houston, Orlando and Tampa within the coming year.
💵💰Don’t miss the move: Subscribe to TheStreet’s free daily newsletter 💰
With the expansion, Walmart’s drone deliveries will be available in five states: Arkansas, Florida, Georgia, North Carolina and Texas.
“As we look ahead, drone delivery will remain a key part of our commitment to redefining retail,” Greg Cathey, senior vice president of Walmart U.S. Transformation and Innovation, said in a statement.
Meanwhile, the “Tonight Show”’s Jimmy Fallon hosted Walmart’s annual meeting, which also included such musical acts as the Killers, Noah Kahan, Camila Cabello and Post Malone. Walton Goggins, who is appearing in Walmart’s new ad campaign, and Chris Paul, guard for the NBA’s San Antonio Spurs, also showed up.
“Walmart is No. 1, so shove it, Target,” Fallon sang, digging at one of the company’s key rivals. “There is no place I would rather be on Friday at 8 a.m.”
Walmart CEO says company embraces change
Walmart President and CEO Doug McMillon told the audience that the company wanted “to be a lab of opportunity,” the Arkansas Democrat Gazette reported.
“The real magic happens with the combination of our people and technology,” he said. ““We love people and we embrace change.”
More Retail Stocks:
- Halloween retailer sounds warning consumers need to hear
- Target expands same-day delivery to 100s of retailers
- Walmart makes surprise cuts as it looks at tariff price hikes
And then there was the news that Synchrony Financial (SYF) and OnePay, a fintech majority-owned by Walmart, would launch a new credit card program. That’s scheduled to go live in the fall.
OnePay, which Walmart created in 2021 with the venture firm Ribbit Capital, will handle the customer experience for the card program through its mobile app.
In 2023, Walmart sued Capital One to end their credit card partnership early, alleging that McLean, Va., financial services company was not fulfilling its contractual obligations.
A federal judge ruled in Walmart’s favor, but Capital One was evaluating its right to appeal. The companies settled last year and the lawsuit was dismissed.
The Walmart card program had 10 million customers and roughly $8.5 billion in loans outstanding last year, when the partnership with Capital One ended, according to Fitch Ratings.
TD Cowen noted that Synchrony would not purchase the existing Walmart card portfolio from Capital One (COF) , so this new program will have to be built from scratch, according to The Fly.
Similar to any new portfolio, TD Cowen said, it will likely be dilutive to holders at first, as Synchrony will need to build reserves, the analyst tells investors.
Analyst cites Walmart’s digital business
However, while the investment firm said it would need more details from the Bentonville, Ark., retailer, the fact that Walmart, via OnePay, decided to come back to Synchrony indicates “favorable negotiating position/economics” for Synchrony in this deal.
It views the plan as a positive for the financial services group.
TD Cowen has a buy rating and $68 price target on Synchrony shares.
Related: Walmart quietly launches new same-day delivery option in 5 more US cities
Walmart shares are up 7% this year and up nearly 45% from this time in 2024.
RBC Capital raised its price target on Walmart to $103 from $102 and affirmed an outperform rating on the shares.
Having attended the company’s Annual Associates & Shareholders Week meeting, the investment firm said management’s tone and messaging were consistent with the Q1 earnings call in mid-May.
Management said it was working on an artificial-intelligence-enabled offering that will reorder core grocery items when they’re running low. The company is working to leverage AI to pair consumer-purchases data and smart-fridge technology, the firm said.
KeyBanc raised its price target on Walmart to $110 from $105 and maintained an overweight rating after the annual meeting.
The firm came away incrementally positive on Walmart’s ability to drive share gains in 2025 and beyond; growth of e-commerce and advertising; and Walmart’s ability to grow operating profit faster than sales over a multiyear horizon.
Importantly, KeyBanc said that it continues to believe Walmart’s digital business is exhibiting flywheel characteristics, where growth should drive additional growth.
While it still sees potential risks to consumer spending as the Trump administration’s tariffs start to flow through to store-shelf prices, the firm says Walmart is among the best positioned in retail.
Related: Fund-management veteran skips emotion in investment strategy
