- The move could distract Walmart from its core business, particularly its e-commerce segment, a UBS analyst says.
- The company posted
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Walmart's potential Humana bid 'could serve as a distraction' from its core business (WMT)
A big push into healthcare could distract Walmart from improving its stores and e-commerce offerings, a UBS analyst says.
Walmart's biggest test may not be Amazon, but rather its ability to stay focused.
If a potential bid for health insurer Humana goes through, it could only serve to complicate its business all while the retailer is still figuring out how to unlock its online growth potential amid sagging e-commerce sales growth last quarter, a UBS analyst says.
A tie-up with the $36.75 billion insurer would mean Walmart has to operate several moving parts simultaneously: a health insurance business, a pharmacy benefits manager, clinics, and retail pharmacies, in addition to its already vast retail and grocery stores.
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However, Lasser acknowledges there are some benefits to the potential merger. It could help diversify the company's revenue streams and attract new customers to its healthcare ecosystem. This could possibly drive traffic and lower healthcare costs in turn. A merger could also fend off competition from Amazon, which has already started offering an exclusive line of over-the-counter drugs on its platform.
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