Walmart Inc (NYSE:WMT, XETRA:WMT) is positioned to extend market share gains amid a price-sensitive consumer environment, according to Bank of America analysts following the company’s latest earnings report, with the firm reiterating a 'Buy' rating and pointing to expectations for a renewed beat-and-raise cycle.
The analysts said the current backdrop favors Walmart’s value proposition, particularly as consumers continue to prioritize lower prices.
They expect share gains to accelerate provided freight conditions remain stable, supporting continued upside to sales momentum. Walmart recently raised its full-year net sales guidance to the high end of its 3.5% to 4.5% constant-currency range, reflecting a first-quarter beat and expectations for 4% to 5% growth in the second quarter.
The bank’s analysts noted Walmart’s ongoing “rollback” pricing strategy, which increased roughly 20% year over year in the first quarter, as a key driver of competitive pricing gaps. Bank of America expects those gaps to remain in place or widen, rather than narrow, supporting continued traffic gains.
The analysts also expect second quarter like-for-like inflation trends to remain broadly consistent with the first quarter, with shifts in category-level pricing dynamics as tariff-related comparisons ease and food inflation trends adjust.
On costs, Walmart reiterated its full-year operating profit growth outlook of 6% to 8% in constant currency, despite roughly $1 billion in incremental freight-related costs tied to higher fuel prices, assuming current levels persist.
Bank of America pointed to last year as a reference point, noting Walmart absorbed more than $1 billion in higher claims expenses and tariff-related pressures while still delivering 5.4% constant-currency operating income growth within its original guidance range.
The analysts also highlighted resilience in Walmart’s alternative revenue streams, including e-commerce, advertising, and membership services.
Third-party marketplace sales rose 50% in the first quarter, supported by expanded assortment and faster delivery options, while membership growth in Walmart+ and Sam’s Club is expected to accelerate as value-focused consumers respond to benefits such as savings and convenience. Advertising and fulfillment services tied to marketplace activity continue to contribute to the company’s broader flywheel effect.
Bank of America wrote that it continues to view Walmart’s mix of pricing power, scale, and expanding digital ecosystem as supportive of long-term earnings growth, keeping fiscal 2027 and 2028 estimates unchanged at $2.90 and $3.20 per share, respectively.
However, the firm trimmed its price objective to $144 from $150, citing a more challenging consumer backdrop and applying a 45x multiple to its fiscal 2028 earnings estimate, down from 47x previously.
Walmart shares traded down 1% at $120 on Friday afternoon.