Walmart Expands Implementation of Automated Fulfillment Centers

Walmart announced on Wednesday that it will expand the development of its automated fulfillment centers using high tech systems to streamline its pick-up and delivery functions.

A Walmart (WMT) fulfillment center is an automated warehouse that houses thousands of its most popular items from electronics to consumables. The fulfillment centers will be built either within the store, or it will be added on to a separate part of the building.

The fulfillment centers will be equipped with “automated bots” that can fetch ordered items from the warehouse shelves using AI and bring them to the packing stations. This will make pickup and delivery a much quicker and more efficient process.

The fulfillment centers will use a combination of machinery and manpower. Fragile and fresh items including meat, seafood and perishables will be hand selected by personal shoppers on the sales floor, while the automated robots take care of the rest.

Some stores will also be turned into automated pick-up points, where customers will be able to drive up to a window, scan a code and receive their order to go. (See WMT stock analysis on TipRanks)

Jefferies analyst Stephanie Wissink reiterated her Buy rating on WMT last week, setting a price target of $177.  This implies upside potential of around 21% from current levels.

Wissink sees 2021 as a “transformational year” for Walmart as shopping patterns normalize. She believes the pending partnership between Walmart+ and Tik Tok is a powerful combination. What’s more, the potential for Walmart to have a “Supercenters as a Service” offering supports her $200 upside scenario price target.

Menawhile, consensus among analysts is a Moderate Buy based on 17 Buys, 4 Holds and 1 Sell. The average price target of $163.74 implies upside potential of around 12% over the next 12 months.

Walmart scores a 7 out of 10 from TipRanks’ Smart Score system, which implies that WMT shares are most likely to perform in line with market expectations.

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