Walmart Inc (NYSE:WMT, XETRA:WMT) will report its third quarter earnings on November 20, and Bank of America is forecasting adjusted earnings of $0.60 per share alongside 3% comparable sales growth in the US, a pace the firm says reflects a deceleration in line with recent third-party spending data.
Bank of America noted that Bloomberg Second Measure observed slower sales trends for Walmart during the quarter, consistent with its comp estimate, though the retailer is still tracking a compound annual US comp growth rate of 7% versus 2019.
The firm also expects moderating pressure from general liability claims in the second half of the year, after $730 million of the roughly $1 billion anticipated for fiscal 2025 was recognized in the first half of the year.
The analysts expect broad-based market-share gains to continue, citing Walmart’s pricing position relative to peers, particularly when delivery fees and online markups at other retailers are considered.
They believe that all income cohorts are contributing to share gains, and demand for fast delivery remains strong, with Walmart now delivering to 95% of US households in three hours or less.
Bank of America said it anticipates continued gross-margin support from higher-margin ancillary businesses, especially digital advertising and third-party marketplace fees. These businesses have supported US e-commerce profitability, and the firm said Walmart’s scale, marketplace growth, and the Vizio acquisition position it to grow digital advertising revenue “in any macro backdrop.”
The firm also said Walmart remains well-positioned to navigate potential tariff impacts through its broad assortment, supplier relationships, and capabilities in pricing, automation, and inventory management.
Despite the retailer’s valuation at roughly 35 times earnings, near 20-year highs, Bank of America reiterated its ‘Buy’ rating on Walmart. The firm's price target is $125, above current levels of about $102.
The analysts pointed to continued share gains, improving long-term profitability, and Walmart’s focus on e-commerce and agentic AI, adding that they expect the company’s recently announced CEO transition will not affect current momentum.
“We see Walmart well-positioned to win in ecom as its value & convenience resonate, and Walmart also continues to focus on being a leader in the agentic AI space,” they concluded.