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, we 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.
UBS also flagged energy costs as a potential variable, estimating that higher gasoline prices had a modest impact in the first quarter, weighing on EBIT by roughly 10 basis points. Looking ahead, the bank said sustained elevated oil prices could add approximately $200 million in quarterly expenses, representing a near-term wildcard for margins.
Overall, UBS said the upcoming results should be well received by investors and are unlikely to trigger a meaningful re-rating in Walmart’s shares, noting that the stock’s premium valuation remains the most debated aspect of the investment case. Regardless, the bank said Walmart is likely to remain a core holding given its relative resilience in a challenging retail environment and its continued ability to set performance benchmarks for the sector.
Beyond near-term results, UBS said the longer-term debate continues to center on Walmart’s ability to scale its “second profit and loss” stream and whether that opportunity justifies its current valuation.
The firm wrote that Walmart appears increasingly well-positioned to do so, pointing to growing traction with higher-income consumers supported by merchandising improvements, expansion of its third-party marketplace, and continued trade-in behaviour.
UBS also highlighted improving returns in Walmart’s e-commerce investments, noting early signs of margin inflection and the scaling of alternative revenue streams such as advertising and marketplace services. The bank said these initiatives are expected to play a central role in driving earnings growth and margin expansion over the medium term.
UBS added that Walmart’s pricing power, combined with its ability to maintain value leadership while absorbing or passing through cost pressures, could support additional market share gains. “We expect the company’s Q1 results to further validate this argument,” they wrote.
Walmart will report its first quarter earnings on May 21.
The stock traded hands at $131 on Friday, up almost 18% so far in 2026.