Retail giant Walmart (WMT) has been tipped to remain the choice of cash-strapped and cash-rich shoppers even with the prospect of tariff-driven price hikes.
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WMT is a Safe Option
Four-star TipRanks-rated TD Cowen analyst Oliver Chen said Walmart’s “value runs deep” a day after the retailer’s CFO, John David Rainey, warned that rates are still too high for it and its suppliers. He said consumers will start experiencing price hikes later this month, with a clearer effect expected in June.
Chen, who kept a Buy rating on the stock and a $115 price target, said the company was a “safer option amid tariffs.” He said its low prices had driven share gains in a range of markets such as marketplace, advertising and e-commerce. Indeed, Walmart’s grocery prices were around 40% cheaper than rivals.
He added that customers, across all income levels, were prioritizing value and delivery speed.
Trust in Walmart
When it comes to price hikes Chen said these would be restricted to “high trust and high frequency” products such as coffee, bananas, roses and eggs. This led to him declaring: “Roses are red, bananas are cheap, buy Walmart’s value, which runs deep.”
Walmart yesterday delivered better-than-expected first-quarter results, fueled by strong U.S. same-store sales and a breakthrough in its e-commerce segment.
Chen also sees “good signs” for its second quarter helped by a strong start to May trading.
Is WMT a Good Stock to Buy Now?
On TipRanks, WMT has a Strong Buy consensus based on 29 Buy and 2 Hold ratings. Its highest price target is $120. WMT stock’s consensus price target is $108.80 implying an 11.01% upside.
