How Morgan Stanley Sees Walmart’s Digital Transformation Driving $6 B Incremental EBIT

Morgan Stanley's latest e‑commerce “Block” analysis spotlights Walmart (NYSE: WMT) as a case study in digital reinvention. From a “disenfranchised” brick‑and‑mortar player to an e‑commerce, retail‑media, and supply‑chain disruptor, Walmart's journey spans three phases:

1. Modest Growth (2009-2012)

2. Heavy Investment (2013-2019)

3. Profit Inflection (& Narrowing Losses, 2020-Today)

Here's a deep dive into each stage, the synergistic e‑commerce Block, and how Walmart's digital pivot could unlock $6 billion in U.S. incremental adjusted operating income—plus, inline API calls to monitor Walmart's financial health.

1. Three Phases of Walmart's e‑Commerce Evolution

• 2009-2012: Modest Growth
  Early online rollout with limited scale; margins under pressure as Amazon's lead grew.

• 2013-2019: Heavy Investment
  Acquisitions (Jet.com, Flipkart stake), fulfillment center build‑out, and technology upgrades drove massive capex.

• 2020-Today: Profit Inflection
  Scale economies and catchment area densification—leveraging stores as mini‑fulfillment hubs—have driven e‑commerce losses to near‑breakeven and expanding operating margins.

2. The e‑Commerce “Block”: Three Synergistic Revenue Streams

1. Online Merchandise Sales (1P & 3P)
   Still loss‑making, but “narrowing losses” as delivery costs fall with higher volume.

2. Walmart Connect (Retail Media)
   Advertising now ~3.5% of GMV, with ~70% flow‑through to Adjusted Operating Income—turning ad clicks into margin.

3. Walmart+ Membership
   15 million subscribers generating $1.3 billion in 2024 revenue and unlocking faster checkout, fueling both retention and ASP growth.

Morgan Stanley projects these streams could drive $6 billion in incremental U.S. e‑commerce operating income over the next three years, with 10-12% margins.

3. Monitoring Walmart's Financial Health Inline

To stay on top of Walmart's evolving fundamentals:

• Company Rating & Information API: Pull WMT's company rating, which evaluates financial statements, DCF analysis, and intrinsic value—so you can quickly benchmark its digital transformation progress against peers.
  Company Rating & Information API

• Ratios TTM Statement Analysis API: Track trailing‑12‑month e‑commerce margin expansion, ROIC, and leverage ratios to confirm when losses fully turn to profits.
  Ratios TTM Statement Analysis API

4. Tactical Takeaways & Risk Controls

Next Steps

1. Sign up for your FMP API key to access the Company Rating & Information and Ratios TTM Statement Analysis endpoints.

2. Embed live rating and margin dashboards for WMT in your research platform.

3. Monitor Morgan Stanley's digital metrics quarterly—when the e‑commerce Block hits breakeven, be ready for an upside rerating.

By combining Morgan Stanley's Block analysis with inline API‑driven tracking, you'll capture Walmart's digital profit inflection—and position ahead of the next chapter in retail disruption.