Walmart Inc (NYSE:WMT, XETRA:WMT) is expected to deliver another robust quarterly performance that reinforces the bull case for the stock, according to UBS, which said there is a high degree of alignment between investor expectations and the company’s likely results. “Overall,…
think WMT’s upcoming print should deliver on the key elements that the market is expecting,” the analysts wrote. UBS expects Walmart to report a US comparable sales increase of around 4.5%, driven primarily by more than 25% growth in e-commerce, partially offset by softer in-store performance
The bank attributed the expected weakness in physical store sales to softer trends in health and wellness, alongside pressure in the pharmacy business linked to Maximum Fair Pricing legislation and slower-than-anticipated adoption of oral GLP-1 therapies. Despite those headwinds, UBS said Walmart’s US segment is still expected to generate operating income growth at the high end of the company’s 6% to 8% long-term target range. The international business is also expected to land at the upper end of that range, reflecting steady underlying profitability trends across key markets.
For Sam’s Club, UBS said the market broadly expects relatively flat year-over-year earnings, as the division faces tougher comparisons from prior periods. On capital allocation and guidance, UBS said investors are debating whether Walmart will incorporate potential first-quarter EPS upside of roughly $0.03 into its full-year outlook or simply reiterate prior guidance given ongoing macroeconomic uncertainty. The bank leans toward the former scenario, though it acknowledged that a significant portion of the market expects a more cautious stance.