Walmart's (WMT) consistent top-line growth is expected to be rewarded by the market, while its digital profit margin acceleration is anticipated to result in EPS revisions over the next 12 months, BofA Securities said in a Friday note.
Core customers of the company will likely prove resilient, and a prolonged period of macro volatility and higher gas prices will result in more households looking to more discount-oriented retailers such as Walmart, according to the note.
BofA analysts said they project Q1 EPS at $0.65, including an assumption of Walmart US same-store sales of 4.5%. The analysts added that they predict the company to follow its trend of maintaining conservative fiscal year guidance after fiscal Q1 results.
Membership trends across Walmart franchises are expected to stay robust amid the company's offerings of value-driven perks such as free shipping, same-day delivery on orders over $35, and fuel savings per gallon, the note said.
Walmart is scheduled to release its fiscal Q1 earnings on May 21.
BofA maintained its buy rating on the company's stock with a price target of $150.
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