Retail giant Walmart (WMT) posted an incredible earnings report and cemented its status as America’s low-cost retailer of choice. But it also offered up some disconcerting warnings about future price hikes, which may impact future earnings.
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It is no secret that much of what Walmart sells is imported, particularly from China. Walmart’s CFO, John David Rainey noted that if the Trump administration’s plan to hike tariffs on imports goes through, that means a lot of its inventory will get more expensive.
That is not something Walmart wants to do. The company’s “everyday low prices” slogan got it to this point, after all. But with tariffs likely to come in a bid to draw more manufacturing back to the U.S., there just is not much option.
Walmart’s Outlook
As for Walmart’s outlook, media reports suggest that good things are likely to come regardless of the tariff plan. Customers, as it turned out, were buying more non-essential goods; things like electronics and toys showed up in more shopping carts, suggesting that a Trump win left people feeling better about the economy.
Throw in higher-earners downgrading to Walmart, and that only improved things. Thus, Walmart pushed up its expectations for the full year, taking sales from 3.75% to 4.75% growth expected to a new range of 4.80% to 5.1%.
Is Walmart Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on WMT stock based on 28 Buys and one Hold assigned in the past three months, as indicated by the graphic below. After a 71.06% rally in its share price over the past year, the average WMT price target of $86.43 per share implies 0.92% downside risk.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
