Walmart Inc (NYSE:WMT, ETR:WMT)'s investments in store remodels, online expansion, and higher-margin businesses like digital advertising are expected to support continued profitability, analysts believe.
Bank of America maintains a bullish stance on Walmart Inc (NYSE:WMT, ETR:WMT) ahead of the retailer's Q2 earnings report, reiterating its "Buy" rating with a price objective of $75.
The firm anticipates Walmart will deliver an adjusted EPS of $0.64 and a 3.5% increase in U.S. comparable sales, driven by "continued positive traffic and gross margin expansion."
"Walmart continues to see momentum across all income cohorts," Bank of America wrote in a recent note highlighting the company's success in leveraging its value proposition and digital capabilities.
Analysts underscored the impact of Walmart's store remodels, online SKU expansion, and express delivery services, which are "driving broad-based transaction strength."
Bank of America also pointed to Walmart's growing digital advertising and fulfillment services as key contributors to the retailer's profitability, helping to offset challenges from a shifting sales mix.
"We reaffirm our Buy on WMT as share gains continue across income cohorts and product categories," analysts concluded, projecting long-term profitability improvements for the retail giant.
Shares of Walmart were trading just shy of $68 by Tuesday’s close.