Walmart Inc. (WMT) announced on Monday that it has partnered with Shopify (SHOP) to create an all-in-one commerce platform.
Shopify shares surged 7% to $795 in Monday’s early morning trading. Walmart rose less than 1% to $118.34.
This marks the first time Walmart has partnered with a commerce platform to enable small to medium-sized businesses to sell through its online marketplace. The integration will allow approved Shopify sellers to list their items on Walmart.com, which gives Walmart customers access to a broader assortment.
“By partnering with Walmart, we will be able to connect merchants with consumers across America within a trusted marketplace, helping merchants drive new sales while consumers discover new products they’ll love,” said Satish Kanwar, Shopify’s Vice President of Product. “Our expertise in multi-channel commerce, combined with Walmart’s reach, will allow us to create better online shopping experiences for merchants and consumers alike.”
Starting today, Shopify merchants across the U.S. will be able to apply to sell through Walmart.com., which is visited by 120 million Americans every month. Shopify’s new Walmart channel seeks to help merchants expand their reach and drive sales. By the end of this year, 1,200 Shopify merchants are expected to be able to sell through the Walmart marketplace.
The world’s largest retailer said that the U.S. e-commerce business grew 74% in total last quarter, and growth in the marketplace outpaced the overall business even as first-party sales were strong.
Shares in Walmart have regained almost all of this year’s earlier losses and are now trading close to their start of the year level.
Last month, five-star analyst Scot Ciccarelli at RBC Capital raised Walmart’s price target to $132 from $129, while maintaining a Hold rating on the stock.
Ciccarelli said that although Walmart stands to be a “net winner” in the expected recessionary or slow recovery scenario he believes that incremental profitability flow should be limited due to higher expenses tied to COVID-19.
The rest of the Street takes a more bullish stance on Walmart. The stock’s Strong Buy analyst consensus is made up of 21 Buy ratings versus 5 Hold ratings. The $136.43 average price target implies 15% upside potential in the shares over the coming year. (See Walmart’s stock analysis on TipRanks).
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