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Pro Analysis

Wal-Mart to rally 27% on profit rebound: KeyBanc

A shopper at a Walmart store in Chicago.
Daniel Acker | Bloomberg | Getty Images
A shopper at a Walmart store in Chicago.

Market share gains and an inflection point in earnings could take shares of Wal-Mart to $90 in the next 12 months, a gain of 27 percent from Thursday's close, according to KeyBanc, which initiated coverage of the retail giant with an outperform rating.

"Walmart's investments in store experience, e-commerce and eventually price are helping drive sustainable market share gains, and we think earnings are poised to inflect positively," wrote equity analyst Edward Yruma in a research note Friday.

"The company has posted positive comps for eight consecutive quarters, which validates recent investments. We think that the company can opportunistically use price investments as a lever to drive the targeted incremental $45B-$60B in sales over a three-year period," read the note.

The three key catalysts that could move the stock, according to Yruma, include: