Retail giant Walmart (WMT) is set to benefit from the fallout of the Iran war for at least the next 12 months, according to a leading analyst.
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Customers Will Remain Resilient
Christopher Nardone, analyst at BofA Securities, said Walmart’s consistent revenue growth is expected to be rewarded by the market, while its digital profit margin acceleration is anticipated to result in EPS revisions over the next year.
Nardone said that core customers of the company will likely prove resilient and that a prolonged period of economic volatility and higher gas prices will result in more households looking to more discount-oriented retailers such as Walmart.
Walmart reports its Q1 results next week on May 21.
BofA analysts said they project Q1 EPS at $0.65, including an assumption of Walmart US same-store sales of 4.5%. The analysts added that they predict that the company will follow its trend of maintaining conservative fiscal year guidance after fiscal Q1 results.
Value-Driven Perks
Membership trends across Walmart franchises are expected to stay robust amid the company’s offerings of value-driven perks such as free shipping, same-day delivery on orders over $35, and fuel savings per gallon, the note said.
Earlier this week Bernstein analyst Zhihan Ma raised his price target on Walmart to $145 from $134 and kept an Outperform rating on the shares. He said that Q1 will be one of bifurcating fates. He believes that the “One Big Beautiful Bill Act” stimulus will be a boost to comparable sales momentum for many retailers catering to the higher-income consumers. However, fuel pressures and general inflation could be challenging to the investment case.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 28 Buy and 2 Hold ratings. Its highest price target is $150. WMT stock’s consensus price target is $140.35, implying a 6.96% upside.
