Shares in U.S. retail giant Walmart (WMT) were lower today despite a leading analyst declaring it was a bigger investment opportunity than rival Amazon (AMZN).
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Five-star TipRanks-rated analyst Michael Lasser of UBS said Walmart’s upcoming second-quarter earnings are likely to reinforce its bullish investment case. Lasser, who has a Buy rating and $110 price target on WMT stock, said the retailer continues to demonstrate “underlying momentum” despite economic headwinds.
“We believe WMT’s upcoming 2Q print will be about ‘checking the boxes’ above all else,” Lasser said in a note.
Walmart is set to release its Q2 earnings on August 21.
Lasser added that the “results are likely to show that WMT’s underlying momentum remains strong,” particularly in areas like grocery, health and wellness, and e-commerce.
UBS said the earnings report should help justify Walmart’s valuation premium over Amazon, noting the company’s “unique opportunity for significant margin expansion” and its consistent financial performance.
This is how these two stocks compare to date this year.
Core Holding
UBS sees the stock as a “core holding”, although Lasser does not expect it to meaningfully raise its full-year EPS guidance of $2.50–$2.60, due partly to concerns around tariffs.
The consensus for the quarter is a hike to $0.73 as seen below.
He still expects WMT to show that it is managing costs effectively and seeing steady demand from customers.
Indeed, UBS said that tariff-related price increases and catalog expansion, including new first-party sales of Jordan Brand products, could lift results.
UBS also highlighted the strength of Walmart’s high-margin businesses like advertising and membership, declaring they now account for half of the company’s profit growth.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 28 Buy ratings. Its highest price target is $120. WMT stock’s consensus price target is $111.69, implying a 9.07% upside.
