Shares of American retailer Walmart (NSYE:WMT) hit a new 52-week high of $163.48 on September 7. The jump in the stock price appears unexpected, considering that Walmart announced a sort of negative statement yesterday. Walmart reduced the starting pay for some of the new staff who process online orders and stock shelves.
Pick the best stocks and maximize your portfolio:
- Discover top-rated stocks from highly ranked analysts with Analyst Top Stocks!
- Easily identify outperforming stocks and invest smarter with Top Smart Score Stocks
Since July, the new employees in these roles have received $1 per hour less than the older employees. Current employees will not see any wage revisions. With the revised pay structure, employees who work as cashiers will receive the same compensation as those who stock shelves for online stores and curbside pickup orders. At the same time, the big box retailer also adjusted the pay bands for senior employees, which led to wage increases for approximately 50,000 store workers.
What Does the Price Cut Imply for Walmart?
A Walmart spokesperson said the changes were made to make the pay structure consistent for better staffing practices, “while also creating new opportunities for associates to gain new skills from experience across the store and lay the groundwork for their career regardless of where they start.”
Walmart employs nearly 1.6 million people across the U.S. and is one of the largest employers in the nation. Experts view the news as a recovery in the labor market.
A change in pay structure by Walmart could even prompt other retailers to follow suit. As the holiday season approaches, retailers will see higher wages as more workers are employed to cater to higher orders. Walmart’s early decision could also be seen as a strategic step to prepare well in advance for the holiday season.
Is It Good to Buy Walmart Stock?
WMT stock is indeed a good long-term investment. Of the 25 Top Analysts who recently rated Walmart, 22 have given it a Buy rating while three have given it a Sell rating. Based on these views, WMT stock commands a Strong Buy consensus rating on TipRanks. Also, the average Walmart price target of $180.17 implies 10.2% upside potential from current levels. Year-to-date, WMT stock has gained 15.1%.
Top Wall Street analysts are those awarded higher stars by the TipRanks Star Ranking System. This is based on an analyst’s success rate, average return per rating, and statistical significance (number of ratings).
