The United States economy is primarily consumption driven.

Walmart (NYSE: ) is one stock you should consider if the country’s economy continues to be driven by sustained consumption.

WMT stock has experienced 6.8% growth over the past twelve months. (See WMT stock charts on TipRanks)

However, as economic growth gains traction, the stock is poised for a rally. I am bullish on Walmart, with the company’s omni-channel sales growth strategy likely to deliver results.

It’s worth noting that retail sales for August 2021 unexpectedly increased by 0.7%. The holiday season is approaching, so retail sales should be good. WMT stock has a dividend yield of 2.20 per year, making it a great time to invest.

Deutsche Bank (DE:) Bullish on Walmart+

Deutsche Bank analyst Krisztina Katai believes that Walmart+ is gaining momentum.

The grocery chain’s membership service was launched one year ago, and is estimated to have reached 32 million subscribers.

It’s worth noting that Walmart+ has an annual subscription cost of $99.

At current levels, subscriptions would yield an annualized cash flow potential worth $3.2 billion. With increasing subscribers, this segment is expected to generate incremental cash flow in the future.

Deutsche Bank rates Walmart stock a buy with a $185 price target.

Omni-Channel Growth, Emerging Market Presence

The future of retail seems to be omni-channel. It’s not surprising that all retailers have significantly boosted their e-commerce presences in the last few years. This includes the likes of Target (NYSE:) and Costco (NASDAQ:).

Walmart also has aggressively expanded its online sales. Walmart reported an 8% increase in net ecommerce sales for the quarter ended February 22, 2022. The company’s e-commerce revenues have increased by 103% in the last two years.

E-commerce sales may slow relative to the physical store as customers return. Walmart remains on course to achieve $75 billion worldwide e-commerce sales before the end 2021.

Walmart International reported net sales for the second quarter of 2022 at $23.2 billion. Due to divestitures, sales were down 15.2% year-on-year.

International growth will likely continue to be strong over the next few years. Walmart bought a 77% share in Flipkart India in 2018.

Flipkart’s stake in Flipkart, valued at $20.8 billion, was purchased by Walmart for $16 Billion. Flipkart was able to raise $3.6 Billion through new funding in June 2021. The Indian ecommerce firm is valued at $38Billion. Walmart appears to be well-positioned for India, which is still in its early stages of growth.

In addition to India, Walmart also saw strong growth in sales from Mexico and China for Q2 2022. Walmart will continue to grow in the emerging markets through its presence.

Wall Street’s Take

According to TipRanks’ analyst rating consensus, WMT stock comes in as a Strong Buy, with 18 Buys and four Holds assigned in the past three months.

WMT stock has a price target of $172.48, which is a 20.3% increase from its current level.

Conclusion

With steady growth in the U.S., and presence in key international markets, Walmart has earnings growth visibility. Walmart’s strong balance sheet makes it a great candidate for acquisition-driven growth.

WMT stock looks appealing from a medium to long-term investing horizon.

Disclosure: Faisal Humayun had no position at the time this article was published.

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