Deutsche Bank Upgrades Walmart, Raises Target Price to $136 as Inflation Supports Market Share Gains

Walmart shares have drawn investor attention after Deutsche Bank upgraded the retailer from Hold to Buy and raised its price target to $136. Deutsche Bank said the current inflationary environment should strengthen Walmart’s value proposition and accelerate its market share gains. With Walmart’s higher-margin businesses growing faster than its core retail operations, there is room for margin improvement. Investors are beginning to look further ahead, beyond the pressure suggested by headline US comparable sales figures. Meanwhile, greater disclosure of gross merchandise value will increasingly highlight Walmart’s transformation from a traditional retailer into a technology-driven marketplace platform.

The upgrade followed an investor meeting in New York with Walmart’s chief financial officer and investor relations team. Management reportedly noted that the company had achieved one of its strongest grocery market share gains in recent years, while its e-commerce, marketplace, advertising and membership businesses also maintained solid momentum. Consumer trends were described as stable to improving compared with three months earlier. As higher-margin businesses outpace core retail operations and the benefits of automation gradually materialise, incremental margins are expected to continue improving.

Management expressed optimism about agentic commerce, viewing the opportunities it presents as greater than the disruption it may cause. Early data from Walmart’s AI shopping assistant, Sparky, show that users’ basket values are approximately 40% higher than those seen through traditional shopping journeys, with higher conversion rates as well. Walmart also noted that rising diesel costs are beginning to feed through to consumer goods prices. If current price levels persist, this could add 50 to 100 basis points of inflationary pressure in 2027.

Walmart’s president and chief executive officer emphasised that the retailer would remain committed to its Every Day Low Prices principle, which has guided the company for more than 50 years. This policy ensures consistent pricing, without variations based on consumers’ personal characteristics or shopping habits.

Market Insight:

Walmart will not vary prices based on who consumers are or when they shop. It will not use information consumers share through its AI shopping assistant, Sparky, to raise prices or hide lower-priced options. The company will also continue to use customer information responsibly and respect customers’ choices regarding data sharing.