By Nate Wolf

Symbotic stock has been on a tear this year, but the warehouse robotics company may not be able to justify that rise even with Walmart as a key customer, according to UBS.

The firm downgraded Symbotic to Sell from Neutral in a research note Tuesday, lifting its price target to $35 from $27. Wall Street is pricing in rapid sales growth in the years ahead, UBS argued, but Symbotic hasn't revealed major customer wins beyond Walmart.

Shares were sinking 8.2% to $55.74 on Tuesday, erasing a 6.5% gain the prior session. The stock closed Monday with a gain of 156% in 2025.

Walmart is Symbotic's flagship customer, with the robotics company acquiring Walmart's advance systems and robotics business earlier this year, and the retailer agreeing to fund the development of new automation systems. The deal could grow Symbotic's order backlog by more than $5 billion, the company said at the time.

But reported backlog levels have remained relatively unchanged since late 2023, UBS noted, and a lack of other major customer wins isn't helping. In the firm's survey of 130 warehouse investment decision makers in April and May, Symbotic ranked as the least likely vendor to be added.

"There is a large market opportunity for warehouse automation and we think SYM's technology is a viable option," Damian Karas of UBS wrote. But in such a competitive space, Symbotic's soaring valuation "comes without much evidence of growth acceleration or new business wins," Karas added.

Symbotic didn't immediately respond to Barron's request for comment.

Shares currently price in 50% compounded annual revenue growth through 2028, UBS estimated. The firm sees a healthy albeit much lower 28% growth rate over that period.

"We see the recent run-up and re-rating as not justifiable," Karas wrote.

UBS isn't the only one on Wall Street expecting a pullback. Around 31% of Symbotic shares were sold short as of the end of August, according to FactSet.

Write to Nate Wolf at nate.wolf@barrons.com

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September 23, 2025 13:09 ET (17:09 GMT)

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