12:04 PM EDT, 04/07/2025 (MT Newswires) -- Walmart's ( WMT ) advertising business is likely to drive growth in the next five years, with the potential to contribute over $7 billion to enterprise earnings before interest and taxes or more than $0.70 to earnings per share, UBS said in a note Monday.

UBS said the retailer's advertising business is projected to reach over $13 billion by 2029, up from about $4.4 billion in 2024, assuming a 25% average annual growth for the period.

Walmart's ( WMT ) retail media segment, Walmart Connect, has become a central part of Walmart's ( WMT ) "second profit and loss statement," positioning the company to benefit from the shift of advertising dollars toward more measurable and attributable channels, according to the note.

"[Walmart ( WMT )] sits at the figurative tip of the spear in terms of being able to assess, influence, monetize, and track consumer behavior," UBS analysts, including Michael Lasser, said in the note. "We think [Walmart ( WMT )] is in the early stages of harvesting profits associated with its valuable consumer relationships and the data that underpins these associations."

Advertising represented less than 1% of Walmart's ( WMT ) sales in 2024, showcasing its long runway ahead, UBS said.

UBS has a buy rating on Walmart ( WMT ), with a price target of $112.

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