UBS reaffirmed its Buy rating on Walmart (NYSE:WMT) and maintained its $112 price target, citing the retailer’s fast-growing advertising division as a powerful long-term catalyst.
According to UBS, Walmart’s retail media arm, Walmart Connect, is emerging as a key pillar in reshaping the company’s business model. The firm refers to it as part of a “second P&L”—a revenue stream increasingly distinct from traditional retail operations.
As more ad dollars shift from platforms with vague attribution to those offering clear, data-backed performance, Walmart stands out as uniquely positioned to monetize consumer behavior at scale. With its massive customer base, online and in-store reach, and deep transaction data, the company offers advertisers unmatched insight into purchase intent and outcomes.
UBS believes Walmart is just scratching the surface of the profit potential tied to its customer data and digital advertising infrastructure. As this segment expands, it could become a meaningful profit driver, further diversifying Walmart’s earnings beyond physical retail.
The firm views Walmart’s advertising capabilities not only as a defensive asset in a competitive retail environment, but also as a strategic advantage that could redefine its valuation profile in the years ahead.