American big box retailer Walmart (NYSE:WMT) is considering investing in the multi-billion-dollar U.S. healthcare sector by buying a majority stake in ChenMed. ChenMed is a privately run chain of primary clinic operators for seniors in the U.S. Both parties are involved in preliminary discussions about a possible deal, a Bloomberg report stated.
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
The deal’s details and financial commitment remain unknown, but the amount could run into several billion dollars, the report suggested. There could also be the possibility of other potential buyers emerging since ChenMed will catch the attention of investors now. Even so, if Walmart’s deal goes through, it could be one of its most noteworthy investments in the healthcare space.
ChenMed is known for its affordable care services for underserved senior patients. The clinic runs on a value-based care model that offers to cover the Medicare costs for the patients.
In recent years, retailers have taken a keen interest in the healthcare sector. Many are buying stakes in private players and pharmacy chains to benefit from the rapidly growing sector. For example, in February, CVS Health (NYSE:CVS) announced a $10.6 billion acquisition of Oak Street Health. Similarly, Amazon.com (NASDAQ:AMZN) bought primary care operator One Medical for $3.5 billion in 2022.
Is Walmart a Buy, Sell, or Hold?
Wall Street remains highly bullish about WMT’s trajectory. Last week, Evercore ISI analyst Greg Melich reiterated a Buy rating on WMT with a price target of $177 (8.1% upside). Also, analyst Corey Tarlowe of Jefferies maintained a Buy rating on the stock with a price target of $190 (16% upside).
Overall, with 25 Buys and four Hold ratings, Walmart stock commands a Strong Buy consensus rating. On TipRanks, the average Walmart price target of $178.26 implies 8.9% upside potential from current levels. Meanwhile, year-to-date, WMT stock has gained 15.4%.
