Walmart seen extending share gains as price gaps widen, Bank of America says

Walmart Inc (NYSE:WMT, XETRA:WMT) is positioned to widen marketplace stock gains amid a price-sensitive user environment, according to Bank of America analysts pursuing the company’s latest net report, with the steadfast reiterating a 'Buy' standing and pointing to expectations for a renewed beat-and-raise cycle.

The analysts said the existent backdrop favors Walmart’s worth proposition, peculiarly arsenic consumers proceed to prioritize little prices.

They expect stock gains to accelerate provided freight conditions stay stable, supporting continued upside to income momentum. Walmart precocious raised its full-year nett income guidance to the precocious extremity of its 3.5% to 4.5% constant-currency range, reflecting a first-quarter bushed and expectations for 4% to 5% maturation successful the 2nd quarter.

The bank’s analysts noted Walmart’s ongoing “rollback” pricing strategy, which accrued astir 20% twelvemonth implicit twelvemonth successful the archetypal quarter, arsenic a cardinal operator of competitory pricing gaps. Bank of America expects those gaps to stay successful spot oregon widen, alternatively than narrow, supporting continued postulation gains.

The analysts besides expect 2nd 4th like-for-like ostentation trends to stay broadly accordant with the archetypal quarter, with shifts successful category-level pricing dynamics arsenic tariff-related comparisons easiness and nutrient ostentation trends adjust.

On costs, Walmart reiterated its full-year operating nett maturation outlook of 6% to 8% successful changeless currency, contempt astir $1 cardinal successful incremental freight-related costs tied to higher substance prices, assuming existent levels persist.

Bank of America pointed to past twelvemonth arsenic a notation point, noting Walmart absorbed much than $1 cardinal successful higher claims expenses and tariff-related pressures portion inactive delivering 5.4% constant-currency operating income maturation wrong its archetypal guidance range.

The analysts besides highlighted resilience successful Walmart’s alternate gross streams, including e-commerce, advertising, and rank services.

Third-party marketplace income roseate 50% successful the archetypal quarter, supported by expanded assortment and faster transportation options, portion rank maturation successful Walmart+ and Sam’s Club is expected to accelerate arsenic value-focused consumers respond to benefits specified arsenic savings and convenience. Advertising and fulfillment services tied to marketplace enactment proceed to lend to the company’s broader flywheel effect.

Bank of America wrote that it continues to presumption Walmart’s premix of pricing power, scale, and expanding integer ecosystem arsenic supportive of semipermanent net growth, keeping fiscal 2027 and 2028 estimates unchanged astatine $2.90 and $3.20 per share, respectively.