01:25 PM EDT, 04/08/2024 (MT Newswires) -- Walmart's ( WMT ) alternative businesses have the potential to contribute nearly one-third of its profit over the next three years and transform the company from a global retailer into a "versatile, technology-driven behemoth," UBS said in a note Monday.

The company's strategic diversification into areas like advertising, marketplace fees, fulfillment services, membership income, and data analytics monetization will continue to reshape Walmart's ( WMT ) profit and loss as the company gains scale in these businesses and evolves into more than a retailer, according to the note.

UBS estimated that about 20% of Walmart's ( WMT ) 2023 earnings before interest and tax came from these new high margin alternative revenue streams and the figure could grow to 31% of the company's profits in 2026.

"This makes [Walmart's ( WMT )] long-term investment case compelling," UBS said in its note.

The firm has a buy rating on the company's stock with a 12-month price target of $63.

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