Walmart’s first-quarter results fell short of elevated investor expectations, prompting UBS to lower its price target.
UBS reduced Walmart’s price target to $141 from $147 after the retailer’s first-quarter earnings missed heightened expectations. Shares closed at $120 on Friday, up 8% year-to-date, as investors had positioned heavily in Walmart amid a weak consumer environment.
Walmart reported adjusted earnings per share of $0.66, matching consensus estimates. US comparable sales rose 4.1%, driven by a 3% increase in transactions and a 1.1% rise in average ticket size, with e-commerce contributing 530 basis points to growth. Global e-commerce sales grew 26% year over year, while marketplace sales and advertising revenue surged 50% and 37%, respectively.
Despite the miss, UBS maintained its long-term outlook, citing strength in Walmart’s higher-margin revenue streams, including membership income, which grew 17%. The firm noted continued gross margin expansion in the US and momentum in digital operations.