Walmart (WMT) stock held up well today after the weekend criticism of its tariffs strategy by President Trump.
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Refused to Buckle
Shares in the U.S. retailer were down just 0.1% in early trading as investors refused to buckle following Trump’s weekend social media post where he urged the group not to hike its prices in the face of tariff pressure. The same tariff pressure, some would say, he initiated.
“Walmart should STOP trying to blame Tariffs as the reason for raising prices throughout the chain,” Trump said. “Walmart made BILLIONS OF DOLLARS last year, far more than expected. Between Walmart and China they should, as is said, ‘EAT THE TARIFFS,’ and not charge valued customers ANYTHING.”
He ended the post by telling Walmart that he and its customers would be watching.
“We have always worked to keep our prices as low as possible, and we won’t stop,” a Walmart spokesperson told Yahoo Finance. “We’ll keep prices as low as we can for as long as we can, given the reality of small retail margins.”
Low Price Allure
This message of maintaining low prices builds on comments from Walmart CFO John David Rainey last week that they would work hard to keep prices low but that some increases were unavoidable.
Walmart said around its Q1 earnings last week that it would increase prices on a broad range of products starting in late May.
That’s something Trump does not want to see at such an iconic U.S. retailer, and it’s a move which could spark similar actions at other companies in the sector.
Analysts remain convinced though that Walmart will still be a low price leader. Four-star TipRanks-rated TD Cowen analyst Oliver Chen said last week that when it comes to price hikes, these would be restricted to “high trust and high frequency” products such as coffee, bananas, roses, and eggs. He said Walmart’s value runs deep.
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 $109.27 implying an 11.33% upside.
