Jefferies on Walmart (WMT): 'Potential Pressure on Sales & Margins Across Retail, But WMT Best Positioned'

Jefferies analyst Corey Tarlowe reiterated a Buy rating and $120.00 price target on Walmart (NYSE: WMT).

The analyst comments "We think WMT's Investment Community Meeting next week will feature WMT's new technology, which is essential for the growth of its e-comm, stores, and clubs. We believe this will give investors a clearer understanding of how WMT is progressing in growing its OI faster than sales. However, unlike two years ago, when WMT's CFO highlighted OI growth could be better than its previous outlook, we don't see a long-term algo or near-term financial update forthcoming. WMT's Investment Community Meeting Upcoming. WMT is hosting its Investment Community Meeting on April 8-9. The event will consist of store, club, and DC & FC tours, meetings with executives, and more. Beyond this event, the next upcoming focus will likely be Easter (on April 20). Recall, WMT also had a strong Easter LY (they noted it helped drive strength across categories, including general merchandise). What's the Setup? Potential Pressure on Sales & Margins Across Retail, But WMT Best Positioned. With record cold surges across the central US, flooding in KY, a later Easter (April 20 in '25 vs March 31 in '24), and more, we think that sales for retailers likely come under pressure in Q1. However, we see WMT as one of the best positioned given its value gaps (wider now versus historical norms in private label, discussed here), scaling ecomm biz, and growing alternative revenue streams. Of note, our WMT margin indicator published here (data only through Feb) illustrates some sequential pressure on Q1 margins. However, there is still ~one month left in the quarter, so we REIT our ests."

For an analyst ratings summary and ratings history on Walmart click here. For more ratings news on Walmart click here.

Shares of Walmart closed at $87.79 yesterday.

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