Walmart’s Local Marketplace test could accelerate e-comm momentum, says Piper

Piper Sandler thinks Walmart’s Local Marketplace test could further accelerate momentum within the e-commerce business. The company continues to test expansions into new categories and services in a deliberate manner, with the enterprise objective of growing EBIT faster than revenue. The firm’s analysis of three initial cities points to a take-rate model focused on local small business. Piper believes it could present a compelling opportunity to augment and differentiate the core app shopping experience, add greater density to GoLocal, and add more customers to the Walmart Business. Continued growth of low capital intensity EBIT streams shows that Walmart is making progress in transforming the business. The firm thinks this drives continued Walmart multiple and earnings growth, and reiterates and Overweight rating on the shares with a price target of $210.