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Pro Analysis

Wal-Mart shares to rally 23 percent in the next 12 months on strong e-commerce growth, Bank of America says

Employees assist shoppers at the check out counter of a Walmart store in Los Angeles.
Patrick T. Fallon | Bloomberg | Getty Images
Employees assist shoppers at the check out counter of a Walmart store in Los Angeles.


Bank of America Merrill Lynch on Wednesday upgraded Wal-Mart to buy from neutral, citing the potential for the U.S. retailer to continue to deliver double-digit growth in its e-commerce business.

"We believe WMT is embarking on a period of sustainable 20-30%+ e-com growth," equity analyst Robert Ohmes wrote in a research note.

On Tuesday, Wal-Mart reported fiscal fourth-quarter earnings that exceeded analysts' expectations driven by a 29 percent rise in U.S. e-commerce sales and a 36 percent increase in gross merchandise volume.

Bank of America says last quarter GMV growth for "Walmart Grocery," Wal-Mart's grocery app and website, outpaced GMV growth for "Amazon Fresh," Amazon's grocery delivery service, another encouraging sign that Wal-Mart's online strategy is paying off.