Shares in retail giant Walmart (WMT) were higher today after analysts at Bernstein suggested that it could be a Trump tariff winner.
Consumer Price Hikes
Bernstein kept an Outperform rating on the stock and raised its price target to $108 from $107 after a careful study of the new world of President Trump’s tariffs.
Bernstein based its analysis on a continuation of a 145% tariff levy on Chinese imports into the U.S. and “Liberation Day” tariffs on other markets such as Canada, Mexico, the UK and EU.
It said it expected retailers to work with their suppliers to lower product costs by between 20% and 25% as a result of the hikes by lowering prices, changing product specifications and/or switching suppliers.
It said that it then expects retailers to pass on the remaining cost rises to consumers. This, in turn, could drive average prices up by low single digits to a high teens percentage and negatively impact volume and traffic.
It said such tariff impacts could translate into double digits earnings per share downside with discount store chain Dollar Tree (DLTR) and Target (TGT) being the most impacted.
DLTR checked out 0.76% higher but Target dropped 2.4%.
Tech Tie-Up
Walmart, whose stock climbed 0.85%, has been vocal in its opposition to tariffs. It has been actively involved in discussions with U.S. government officials to address the impact of tariffs on the retail sector, particularly those affecting Chinese imports.
However, Walmart itself is less affected due to its domestic sourcing strategies, especially in groceries, which constitute a significant portion of its sales.
WMT stock was also lifted by another analyst note this time hailing the disclosure last week that Upstart Holdings (UPST) and OneProgress Services, or “OnePay,” a financial technology company that is majority owned by Walmart had sealed a one-year strategic partnership. “The partnership is expected to help Upstart market consumer lending products to Walmart’s customer base,” UPST said at the time.
Two-star TipRanks-rated analyst Dan Dolev of Mizuho said the deal was a “strong positive.”
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 $108.29 implying an 8.79% upside.
