On Monday, a research note on Walmart (NYSE: WMT) with positive analysis was published by a Morgan Stanley analyst.
Walmart’s shares are now up 0.7 per cent as of the time of writing, and the analyst has assigned them an Overweight rating with a $150 price target.
According to the most recent AlphaWise Consumer Pulse Survey Wave 25 (conducted 8/2- 8/5), the analyst stated that Walmart+ has 17.0 million members or 13.0 per cent of US households. “Walmart+ has 17 million members, a 1 million rise over our prior estimate from early May.
Although we did some surveys in the interim that indicate membership shifting in the 16-18m range, “our newest 17m estimates is up about 1m from our last publicized estimate from early May; we consider 17m is thus a credible current estimate.”
According to the analyst, these figures indicate that membership momentum is rising at a “very small, but steady pace,” and free same-day delivery is the main incentive for customers to sign up for Walmart+.
The analyst continued, “Overall, membership has expanded from 8-9m at year-end ’20 to 10m at mid-year ’21 to 15m at year-end ’21 to 17m today. Our prior 16m projection from May was 1m over the preceding estimate from late January.
The distinguishing feature of Walmart+ is still same-day delivery (focused on groceries) gives it a competitive advantage over Prime, which we believe offers comparable grocery benefits but is not as popular or well-regarded by consumers. “We continue to observe that 80 per cent of existing Walmart+ members are also Prime members, suggesting some openness to having two memberships.”