Oppenheimer analyst Rupesh Parikh downgraded Walmart (NASDAQ: WMT) from Outperform to Perform.

The analyst comments: “Ahead of earnings on 8/20, we spent time revisiting our investment thesis. Based on our work, we are downgrading shares to Perform from Outperform and removing our $140 PT. We now see a less compelling outperformance case shorter term driven by three primary factors: 1) top-line pharmacy headwinds in the Walmart US business, which we believe could drive a comp shortfall vs. Street forecasts in Q2 and later in the year primarily impacted by the IRA; 2) a peakish valuation that could be more susceptible to a re-rating lower if Walmart US comp growth slows from 4%+ to the 2.5-3.5% range; and 3) Street forecasts already model well ahead of longer-term guidance leaving less room for upside. Although we are stepping to the sidelines, we still remain very upbeat on WMT's longer-term prospects.”

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Shares of Walmart closed at $110.71 yesterday.