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Walmart Substantially Growing In Healthcare

On Friday, analysts with investment bank Morgan Stanley (MS) warned of a potential industry shake-up, with Walmart, Inc. (WMT) displaying efforts to seek substantial growth in the health care markets. The retail giant has been acquiring technology relevant to medical care management and opening health clinics.

Currently, Walmart is the third-largest pharmacy in the United States. Morgan Stanley analyst Simeon Gutman states that they are a “sleeping giant to watch” with their subtle continued movement into the healthcare space. It was advertised this past week that Walmart would be offering its own Medicare-based insurance plans directly to customers starting in August. Walmart has not made a formal statement on the new insurance move.

An advertisement on the company’s website for a Medicare Sales Supervisor stated, “Yes, you read that right, Walmart now has an insurance agency. Walmart, the Fortune #1 Company and the Nation’s largest private employer, is helping people save money and live better. Walmart strives to be a center of wellbeing (sic) in the communities we serve, and we have a unique, brand-new opportunity to help millions of people find the best Medicare insurance available. We need passionate health insurance professionals to help us build this new business from the ground up and achieve our mission.”

With this new insurance development, paired with the opening of clinics, Gutman states, “Walmart’s step into insurance likely has few major industry implications in the near to medium term, but this may change later.” The analyst’s statement refers to potential threats the retail giant’s move into healthcare could present to insurance companies such as eHealth (EHTH) who directly sell policies to the public.

This insurance development is the latest in Walmart’s expansion news. Walmart intends to directly compete with Amazon (AMZN) Prime through its new subscription service, Walmart+, which is due to launch this month. The new membership feature will be priced at $98 per year and include access to members-only deals, discounts at gas station pumps, and same-day grocery delivery. This past week a teaser site for the new membership service went up, and on Tuesday, the retailer’s stocks rose by almost 7% to $126. The company’s shares have continued to grow since then and closed Friday up another 2.29% to $130.68.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Trader Buzz). I have no business relationship with any company whose stock is mentioned in this article.


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