Walmart stock remains a core holding as UBS reiterates Buy rating

Investing.com - UBS has reiterated its Buy rating and $110.00 price target on Walmart (NYSE:WMT) ahead of the retailer’s upcoming second-quarter earnings report, scheduled for August 21. The retail giant, currently trading at $102.97, has delivered an impressive 48% return over the past year. According to InvestingPro analysis, the stock appears to be trading above its Fair Value.

The investment firm expects Walmart’s Q2 results will demonstrate that the company’s underlying momentum remains strong, positioning it well to generate its algorithm over multiple years.

UBS believes strong results will make the market more comfortable valuing the stock on 2027 earnings per share, addressing the ongoing valuation debate where Walmart currently trades at approximately 34 times 2026 EPS compared to Amazon (NASDAQ:AMZN)’s 28.5 times multiple.

The firm argues that Walmart’s premium valuation is justified by its significant margin expansion opportunity, with enterprise operating margin projected at 4.2% this year compared to a peak of 6.1% in 2010.

UBS also cites the consistency and visibility of Walmart’s business as additional factors supporting its current valuation, reinforcing the firm’s view that the stock should be considered a core holding for investors.

In other recent news, Walmart has been the focus of several notable developments. Erste Group upgraded Walmart’s stock rating from Hold to Buy, indicating a positive reassessment of the company’s market position. Bernstein SocGen also adjusted its outlook on Walmart, raising the stock price target to $113 while maintaining an Outperform rating. In a strategic move, Walmart announced a multi-year partnership with Major League Soccer and Leagues Cup, aiming to enhance fan engagement through various initiatives. Additionally, Walmart plans to transform Vizio into a private-label brand by the end of 2025, restricting its sales to Walmart and Sam’s Club stores. This move follows Walmart’s acquisition of Vizio for $2.3 billion last year. Meanwhile, some suppliers have paused orders from Bangladesh due to potential tariff threats from the U.S. administration, impacting the global supply chain. These recent developments highlight Walmart’s strategic initiatives and the challenges it faces in the current economic environment.

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