Walmart's Q2 Earnings Expected to Reinforce Bullish Investment Case: UBS

Walmart's upcoming Q2 earnings are expected to reinforce its bullish investment case, according to UBS analysts. They predict the retailer will demonstrate underlying momentum despite economic headwinds, with strong performance in grocery, health and wellness, and e-commerce. The bank views the stock as a "core holding" and believes the Q2 print will justify Walmart's valuation premium over Amazon.

Walmart's upcoming second-quarter (Q2) earnings report is expected to reinforce the retailer's bullish investment case, according to UBS analysts. The analysts predict that Walmart will demonstrate strong underlying momentum despite the current economic headwinds, with robust performance in key areas such as grocery, health and wellness, and e-commerce. UBS views the stock as a "core holding" and believes that the Q2 print will justify Walmart's valuation premium over Amazon [2].

The bank's analysts note that the earnings report is likely to show that Walmart's underlying momentum remains strong, particularly in areas like grocery, health and wellness, and e-commerce. UBS expects Walmart to post an enterprise operating margin of 4.2% this year, which is still below its 2010 peak of 6.1%, but the analysts view the stock as a solid investment [3].

Walmart is expected to manage costs effectively and maintain steady demand, with general merchandise performance being a key focus. The company is also expected to show it is managing tariff-related price increases and catalog expansion, including new first-party sales of Jordan Brand products, which could lift results. Additionally, UBS highlights the strength of Walmart's high-margin businesses like advertising and membership, which now account for half of the company's profit growth [3].

While the analysts do not expect Walmart to significantly raise its full-year EPS guidance of $2.50–$2.60, they believe that the company will demonstrate it is effectively managing its costs and maintaining steady demand. The upcoming earnings report will be closely watched by investors and financial professionals, as it will provide insights into Walmart's ability to navigate the current economic environment and maintain its strong financial performance [2].

References:
[1] https://www.ainvest.com/news/walmart-mexico-leadership-shake-mirror-global-retail-fragile-equilibrium-2508/
[2] https://www.investing.com/news/analyst-ratings/walmart-stock-remains-a-core-holding-as-ubs-reiterates-buy-rating-93CH-4174062
[3] https://www.investing.com/news/stock-market-news/walmarts-q2-print-should-support-the-bull-case-ubs-4174120