Walmart Named Top Retail Pick by Mizuho on Delivery Network Strength

Mizuho has elevated Walmart (WMT) to a top pick among retailers, arguing that the company's rapidly expanding ultra-fast delivery network is an underappreciated asset that could rival Amazon's. The investment firm's increased confidence follows an extensive, AI-driven analysis of the retail giant's logistics and delivery infrastructure.

The Analyst's Take

According to Mizuho, Walmart's delivery network is evolving into a powerful, nationwide "demand consolidator." The firm's analysis found Walmart's claims of reaching approximately 60% of U.S. households within 30 minutes to be highly credible, suggesting the actual coverage may even be understated. Mizuho reiterated its Outperform rating on the company's stock.

Despite the bullish outlook on Walmart's strategy, the firm adjusted its price target to $130 from a previous $137. This new target is based on applying an approximately 36-times multiple to its fiscal year 2028 earnings estimates. The analysis comes as Walmart shares have pulled back about 20% from their May peaks, a period during which the S&P 500 gained 2%, according to the source.

Unlocking Nationwide Delivery

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Mizuho's proprietary analysis indicates that about 80% of U.S. households are within the distance threshold for 30-minute delivery, highlighting significant room for growth from Walmart's current capabilities. The key to unlocking this potential, the firm notes, lies in the expansion of "dark stores."

Walmart has begun testing these facilities in the U.S., which are small-format locations (under 10,000 square feet) dedicated to fulfilling digital orders for rapid delivery. Mizuho estimates that adding 300 to 500 dark store locations could supplement Walmart’s existing 4,500+ traditional stores, potentially adding another 5 percentage points to its household penetration, especially in dense coastal markets like San Francisco and New York City.

Underappreciated Assets

The firm also pointed to Walmart's Spark Driver platform, with its more than 1.6 million users, as a crucial and underappreciated component of its logistics network. Mizuho believes the platform's ability to offer drivers higher gross earnings per trip due to larger basket sizes makes it a competitive option against other gig platforms and provides essential network density.