Investors should snap up shares of Walmart ahead of earnings, according to Credit Suisse. Analyst Karen Short maintained her outperform rating on the stock and raised her price target by $10 to $180. Credit Suisse’s new forecast suggests a 12.3% upside from Thursday’s close. “We continue to believe WMT remains very well positioned for the current environment, as it continues to exhibit solid defensive characteristics, given its value-driven consumables-oriented business in the wake of a volatile consumer backdrop and slowing but elevated inflationary headwinds on the consumer,” Short wrote in the Friday note. Walmart is set to report its third-quarter earnings Thursday before the market opens. Credit Suisse raised its earnings per share forecast for the second quarter by 6 cents to $1.74, exceeding the consensus of $1.69, according to analysts surveyed by FactSet. Short expects Walmart to continue its robust sales momentum, driven by factors including: Strong grocery sales reflecting market share gains from competitors and higher number of rollbacks Transaction gains buoyed by consumers trading down Growth in private label products Strong gains in health and wellness sales, buoyed by the weight loss medication boom “From a profitability standpoint, WMT should have benefited from lapping excess markdowns from last year, supply chain productivity initiatives, and business mix, which should start to contribute in 2Q and ramp up in 2H,” Short wrote. To be sure, the analyst added that these tailwinds should be partially offset by Walmart’s continued softness in general merchandise sales. But she said Walmart should benefit from increasing sign ups to its Walmart+ membership program, which allows participants to have free delivery from their store and member prices on fuel at select stations, among other perks. — CNBC’s Michael Bloom contributed to this report.
